tv U.S. Senate CSPAN August 28, 2013 10:00am-2:01pm EDT
>> fiscal consolidation has been part of the conversation at the -- >> we'll leave the last couple of minutes of this program to go live now to the national press club here in washington where the national business group on health is releasing its annual survey on health benefits. the survey is on what large employers will be doing with their health benefits next year and how much it will cost. this is just getting underway. >> with me is karen mar low who conducted this survey. i guess i should have mentioned i'm helen darling, and this is the national business group on health. we're a nonprofit organization of mostly very large employers
including 66 of the fortune 100. we are nonprofit 501(c)(3). we do not lobby. we provide information, education and research. our survey is especially important, because it's the first look at what's going to happen in 2014. since we survey our large employer many members at the time they have made all their final decisions for the subsequent year, so we do this annually which is in about the june/july time frame. this survey, then, is a look forward -- not a look backwards, which many of them are -- based on responses of 108 large employer members. it reveals what employees will see in their open enrollment packages. another difference for our survey is they're mostly very large companies, and as you can see in the chart pack that you've been given in the report, we have 22% have employees up to
10,000, and, you know, the affordable care act, their definition of a large employer is 50 employees. so we're talking about in the thousands. 27% have 10,000-25,000 employees in our survey, and 12% have more than 900,000 employees -- 100,000 employees. so these are really big employers. we asked them what they budgeted for their medical claims cost and related administrative expenses. they do not pay premiums. these are self-insured employers, so they basically pay medical claims right out of their own assets. they pay for administrative services, they may buy special services through health plans or insurance carriers, but they are not insured, and they do not pay premiums. today projected that they would need 7% in 2014, the same amount that they projected -- a 7% increase -- that they projected for 2013.
and by the way, we won't mow the final numbers for 2013 until the late spring of 2014. you have to have what's called a runout, so claims that come in. so we don't know what they will actually end up needed, but i can tell you they had some expenses this past year they did not anticipate. i can go into that in more detail later, the $63 for the reinsurance pool. as you will see, employees will not see big changes in their proportionate share of cost in 2013 or 2014. but employees at open enrollment are likely to have cost increases in special circumstances such as tobacco surcharges, spousal surcharges and financial penalties or rewards related to wellness program. so they need to read their material very carefully. rising health care costs remain a serious concern of u.s. employers especially in light of the slow-growing economy, the
low growth, very low growth in wages and fears about forces that threaten to drive up costs even higher. there's a lot going on that's going to drive up costs. some of them are due with changes in the industry, some of them are due with specialty drugs, high cost cps, a whole range of things. they are also deeply concerned about the looming threat, the sword of damocles of the cadillac tax in 2018. which is not so far away. so think of that as the sword of damocles. because it's going to be a whopping tax on anyone who has not controlled their costs very significantly. this year, upcoming -- 2014 -- is a big year for the nation. but for most large employers, plan designs and health care strategies will not be be affected that much other than costs and some of the desires and things they have to do to control cost. even the delay for one year, the
implementation of the employer mandate, doesn't have a big effect be on large employers. employers spent considerable time and energy this year designing health plans that comply with the various provisions of the affordable care act that would have become effective next year. a decision to delay the employer mandate and the caps on out-of-pocket expenses have provided some respite for some of those requirements. but the pressure consistently will continue on health care costs, and that's for everybody. and it's very easy especially in the debates that we have around this town and around the nation to forget. we have not really solved the problem of health care costs. no one has. and we've got to do that. employers expect that certain populations -- so when we ask them about the public exchanges when they're up and operational, they find that the public exchanges may be a viable option on an individual basis in 2014.
they think that 41% or, that is, 41% of the employers believe that cobra plan participants might find public health exchanges to be the most cost effective option. that's pretty clear. 26% felt that some pre-65 retirees might opt to join the exchanges. it could be higher, but that's what was reported. while 20% believe that part-time employees will do the same. only 12% thought that current full-time employees might choose the public exchanges. and you could imagine that these are most likely to be in industries like retail and hospitality who have more seasonal employees, there are more -- people who are sort of in and out of the work force, are more part-time employees. privacy exchanges, that we're hearing more and more about, are another option that some employers are considering for active employees sometime in the
future. so they're thinking more ahead. that might be an option in the future. not 2014 future. in fact, only 17% plan to move retirees to private exchanges in 2014. very few employers are considering eliminating health care coverage entirely. so 3% are considering. and the keyword is considering. we know that health benefits remain a key part of the total payer, total rewards package for employees to recruit and retain talent. if you want to be taken seriously as an employer especially in areas where the market is really tight, you would have to provide a good health benefit package. certainly, this year, next year and probably for many in the future. implementing a consumer-directed health plan was considered the
most effective tactic to control rising costs. cited by more than a third of responsibilities, 36 -- respondents, 36%. 72% of our large employer members offer at least one consumer-directed health plan. this number has remained relatively steady over the last couple of years, but 22% are now offering only a consumer-directed health plan. so they don't have hmos, they don't have preferred provider organizations per se or point-of-service plans. they just have a consumer-directed health plan. they may have a couple of options in that, so there might be a high deductible and a higher deductible for which the employee would pay less, but they have no other option. we asked employers about initiatives they use to manage the health of their employees, so at this point i'm going to ask craig likens to come up and give you more details on those options.
>> thanks, helen. so i won't go over all the tactics that employers are utilizing, but let me address some of the tactics that employers indicated are the host effective for controlling health care costs. now beyond consumer-directed health plans, health improvement initiatives were listed as being one of the most effective tactics for controlling rising health care costs in 2014. 58% of employers indicated that wellness initiatives would be one of the top three methods for controlling costs. these programs include things like tobacco cessation programs which are offered by 89% of responsibilities and telephonic or on-site health coaching offered by 77%. more than half the respondents make weight management programs available to employees while eight out of ten conduct health assessments and biometric screen havings. many employers -- screenings. for example, 44% currently have
an on-site health clinic in at least one of their locations. these clinics have traditionally provided a suite of services including occupational health, acute care and primary care services. but now nearly two-thirds of employers are offering health improvement services at all their clinics. and some are now offering chronic care management and on-site employee assistance programs as well. now, most respondents anticipated that for the health plan with the greatest participation, still the ppo for the majority of respondents, cost sharing would not increase in 2014 for employee-only coverage. the average employee contribution to the premium will remain at 20%. so the employer will still be with continuing to pay roughly 80% of the cost, and the employee will be responsible for the remaining 20%. and the average in-network deductible for employee-only coverage will remain at $500. now, employers did indicate a slight increase in cost-sharing
requirements for family coverage where an employee contribution to the premium increased from 23% to 24%, and the deductible would rise by an average of up to $200 up to $1200. this change is necessitated by the increasing costs and because employers want to continue their mission to keep costs affordable for employees. nearly two-thirds of employers, 66%, will now cover surgical interventions for the treatment of severe obesity in 2014. additionally, with the release of the first fda-approved weight loss medications for the treatment of obesity in the last year, 36% of employers reported they will cover these medications in 2014. now, employers will continue to use a number of pharmaceutical had the techniques like they do for all farm 150u9 calls -- pharmaceuticals including things like prior authorization, eligibility restrictions and quantity limits to insure that these medications are used appropriately.
some employers are also directly contracting with surgical centers of excellence, patient-centered medical homes or other providers while other employers are encouraging utilizations of centers of excellence and high performance networks by reducing cost-sharing requirements for employees. lastly, employers are continuing to offer innovative solutions to insure timely, convenient and cost effective consultations with physicians by offering telemedicine opses. options. with that, let me turn things back over to helen who will take us through the rest of the survey. >> thank you, craig. and, of course, we're happy to answer more detailed questions if you're interested. so most employers are going to be doing everything they can, and you can be assured that the costs of medical claims for 2014 would be even higher if they weren't doing these things. so they will be doing all they can to reduce medical trend. we're hearing more and more, as i'm sure you all are too, about specific steps such as spousal
carveouts or spousal surcharges, tobacco surcharges and so forth as ways to control costs and also to balance some of the increased expenses due to the affordable care act. although most employers won't increase incentives beyond the 20% under prior law, they're able now under the current law, the affordable care act, to go up to 30% of planned costs and wellness incentives. but most are not go beyond the 20%. all of this is going to be done in a world of much more transparency. we're going to see a very different world the next couple of years just around the what's happening with transparency about medical charges, quality, safety, a whole range of things. the process of selecting benefits at open enrollment for most americans has become much more complicated. and the employee will pay even
more if they don't read their materials very carefully and take advantage of the opportunities that they will have to earn back wellness credits. so what's really happening is most employers are putting in some increases that will be, in a sense, balanced out by wellness credits. but you have to do what you're supposed to do in order to earn those back. so it's -- and if you don't do these things, by deball you will -- default you will probably end up paying even more. they also need to make smarter decisions about dependents. so what we're seeing is a definite shift towards employers looking at the total pay package, what they're giving to people in cash wages, other benefits and health benefits. and they're trying to make that more balanced and more performance related. so, for example, they may change the proportion that they pay for families because many employees
either don't have families, or they have the family might be covered under a different employer. so what they're trying to do is move more towards a package of benefits that's more balanced between individuals, two and three parties and families. so you'll see a lot more on that. and there's been a lot of stories, as you know. so with that, i will end and open it up for questions or comments from anyone. yes, okay. thank you, sue. >> hi, helen, i'm jay hancock from kaiser health news. you put this in terms of employers see the exchanges as viable for certain populations that they've traditionally covered. to what extend is that perception -- to what extent is that perception and what they're expressing here, so what extent is that a result of -- it sounds
like employers are saying they expect to see members of these populations seeking coverage in the exchanges. next year. would you say that's correct? in fact, i think that was the question. >> yes. so, i mean -- >> is that going on because the employers are reducing their coverage and their benefits? it seems there would be be a cause and effect here that you didn't address. >> okay. well, actually, there isn't a cause and effect there. so, for example, first of all, they're not -- you used the word "reducing their benefits." they're actually not. the dollars they're putting into care are going to go up next year. so they're not reducing their benefits. but they definitely are, for example, one of the reasons we needed the affordable care act, we needed a change in health benefits for certain populations because they didn't have access to a functioning private,
individual or family option or even a small employer option in the marketplace. so you had people, for example, who were on cobra. you could be on cobra if you had a death in the family, someone was terminated and you lost benefited, someone was disabled and you lost benefits or you are divorced. so in the old days even before cobra, there were people who once someone was no longer connected to the workplace, they had to go into the individual market which, in cases, didn't work at all, and whenever it did, it was very expensive. so what we have is all those populations have been partly taken care of. cobra gives you coverage for a while, 18 or 36 months depending on the circumstances, but it's very expensive. it's paying the full tab for whatever your employer provided before. so you pay 102% of what the cost of that coverage would be.
so now all they're saying is in the future with the exchanges, with the individual exchange these people who otherwise had nothing and in the meantime had something that wasn't all that great, they'll actually have a functioning, individual market. so i think there is a, i think, completely understandable belief that if the exchanges work or the health insurance marketplace works the way they're supposed to work, those should be good options for people even in a moderate income situation. and if they're low income, it's even better. so right now if you're a cobra, so you lose your job because of divorce and you had to go to cobra, that was the only option you had because the state didn't have any option for you, then if you are moderate or low income, you had a very expensive package that you had to buy back. under the exchanges that will change pretty dramatically. so i think that's all employers are thinking.
not related to their -- you used the word reduced. it's not related to what they're investing in. it's solving for a market problem. >> so even you have 12% of your members thinking about seeing active employees, full-time employees, that's not necessarily -- you know, you know there's this debate about whether the aca is leading to erosion of coverage among your members, and you don't think that's evidence of that, that 12% are looking at having their full-time employees who are now covered by the company be in the exchanges next year? >> right, right. yeah, so -- well, first, i would say, yes, 12% said that they would, could see -- consider that, see that as a possibility. my, of course, two to things about that's probably very specialized to industries. so you have businesses like retail and hospitality, hotels and things like that where
between the relatively low wages and the relative cost of health care, these are people that even in the best of circumstances may not be taking the benefits they've got because they can't afford them. so that's -- i think that's what we're seeing in the 12%. if you were sitting in almost any organization, let's say you ran a shoe store and you had clerks. i was just in a she story -- shoe story, so i had this conversation with somebody that was waiting on me. she made $12 an hour, the woman who was waiting on me. she could not afford health insurance. now, she's a good example of somebody if she, when the exchanges are open, she could go to the exchange, hopefully get affordable health insurance, and she would get a very substantial tax credit. thank you. >> hello. brian from employee benefit
adviser and health insurance exchange news. i want to talk about the private exchanges. you said they may consider it in the future, but not now. you look at the private exchanges, so why do you think your member companies are looking at it, quote, in the future and not now, and when do you consider the future? the how many years from now? >> well, first of all, they are new exchanges. the private exchanges are brand new, and i don't know the exact number, but -- you should know this and, by the way, i do subscribe to your newsletter and read it every time i get it. but the number of people who are actually in a private exchange now is still quite modest because they're brand new. so i think part -- if you're a large employer, you're certainly going to be thinking about it for retirees. that's the very obvious one, and i think we will see a lot of that in the future. but they have to be up and running, and they have to be serving a lot of people, and they have to give evidence, if
you will, of a good solution. right now i think a number of employers feel because there is a track record with retirees that that's a very comfortable step for retirees, because their track record is around retirees. but that's all. the future is 2015. you know, right now all the decisions were made, and everybody put to bed 2014 two months ago, basically. so they're already beginning, in this december they will start doing all their planning for 2015. and then six, seven months into be the year it'll be 2016. i mean, in the benefits world the cycle, it comes almost a full year ahead. it has to, because it takes so long to make these things happen. okay. >> paige -- [inaudible] with politico. just going back real quickly to the 12% of employers that said
they think folks will want to go to the exchanges. were they, was that just, was that all employees or just full-time employees? or art-time employees as well? be because presumably wouldn't they be penalized if full-time employees went to the exchanges? >> right. so, yeah, but the way they report it, yes, do you think, do you anticipate your current, active employees would go. so, yes, currently active employees. and i would, i would guess although we didn't ask this specifically that this is mainly they're looking at the finances. so you would imagine that someone would choose to go because they're going to get a federal tax credit even if that's not ideal if from your point of view as an employer. but if they can't afford the benefits, i mean, if you look at some of the cost sharing, you know, for family coverage i think the total number's like over $3,000. i mean, these are people
literally living worse than paycheck to paycheck, because they probably also have debts. so they don't have money for cars, they don't have hundred for paying -- they don't have money for paying, they certainly don't have a house. they have trouble paying their rent. so the idea that they could shell out $3,000 in a year just for their share of health insurance is just is unrealistic. it's heart wreaking. i mean, we should do something about cost in this country for everybody. >> jerry geisel, business insurance. i'm just looking at my notes. could you, again, elaborate on the move of employers to either impose higher costs, surcharges for family coverage or, in fact, deny coverage if the spouse is eligible for coverage from his or her own employer? i think you used the word, you know, they're trying to reduce the difference between single coverage and family coverage. >> yeah.
so, um, well, two things. first, as you all probably know already, another adult dependent is very expensive. and then, of course, children are less expense expensive, bute less, the more you have, the more they cost too. so when an employer looks at the total cost for an employee, in fact, the numbers -- when we calculate, we take total medical claims cost and divide it by number of employees. so in effect, people who don't have large families are subsidizing those with large families. when we have to increase costs for employees, it's because of costs overall increasing, and the employer has to do that too. but the way to do that is to say, wait a minute, we want to make it fairer across the workplace. we want to move towards giving more in a pay package -- wages and other benefits -- and less
in health care that's skewed towards larger families as opposed to individuals. and if you're going to come up with ways to do that, at this point because we've been at this if for many years, there are only so many different ways that you can control cost. and historically, the co-insurance has been one way to do it. higher deductibles have been another way. surcharges, tobacco surcharges, a whole long list of things that can be done. many of those have already been done. so we're moving more towards a vision of total pay per employee and then, for example, if the employee is able to keep more in his or her wages, then someone who has a larger family, wants to cover lots of people, would maybe pay more out of pocket. but they would have more out of pocket because they'd be getting more money.
now, somebody who doesn't have a large family to cover would get more out of pocket, but they wouldn't necessarily have to use it for health coverage. they might be able to fund be their retirement. or they might be able to just have more money in their pocket. so that's the broader thinking, the sort of total reward thinking that's going on. and it's a bit of a change. and what they're trying to do is to do these things slowly and incrementally so it's not a big shock. but that's the direction, i think, everybody's headed in, is trying to change the relationship with dependents. now, it just happened that when the affordable care act added the requirement that everyone who was -- not even have to be a dependent. a child adopted or natural child had to be covered up to age 26. that increased the cost of family coverage in this country. and so, you know, somehow that has to be balanced. if you spend a lot more, i mean,
i know of at least one with employer that they gained 8,000 people. now, even if they're not the most expensive 8,000 people, that's a lot of people. so, you know, we have to rethink if, if you will, the way -- an employer has to rethink how they reward people for the work they do and try to be as fair as possible. because if costs go up, everybody equally has to pay them unless you start doing things. this is why the tobacco surcharges have become so important. smokers cost employers a lot more. they also cost other employees a lot more. and that's part of what they're trying to do, is to balance some of those effects. yeah. >> um, alicia alt with img head call media. we publish newspapers for doctors. you're talking about -- it looks like most of the emphasis is on what employers can do with
employees, you know, tobacco cessation, surcharges for certain behavior, consumer-directed health plans. it looks like employers are only very tentatively embracing acos, patient-centered medical homes, what they can do with physicians. is that never going to be a focus? is it always going to be on the employee? is there a reason why they're only very slowly adopting these new models? >> yes. there's not very many of them out there or that are functional. and contracting in the private sector among private entities is much more complicated and harder. they don't -- they can't be like the federal government and just say, you know, we're going to do this. this is what we're going to pay you, you know, this is what we're going to do. so health plans who administer and networks who administer the services for large employers, they would have to at least help with that. and it's a lot harder than it
sounds. but i can tell you that the numbers reflect a modest, if you will, commitment. there's no modest commitment. patients in medical homes and acos around the country are really delivering the goods in terms of value, quality, safety and affordability, then i can assure you that our large employer men members would be thrilled -- can members would be thrilled. the other thing you have if you're a large employer is you're in a lot of different locations. so it's very hard to administer benefits differently in one location from another. so, for example, if if we have, if we have patient-centered medical homes and we say ask be some of them are doing that, we will reward you if you're in a patient-centered medical home, if you're in a primary care, so family practice, that kind of thing, but if two-thirds of the employees live in areas that don't have them, then they don't have that advantage. so you've got to have a much
okay, thank you. >> sean phillips with the m a. have a question about transparency, we are seeing more articles in the new york times recently how expensive a sailing trip can be, where one provider will charge $500 and another one charges only $100. these are things that will be difficult for consumers to see, that line item might not be easily broken out, might not see it at all. as you mention it, consumers read through their packages, the package provided by the employer to the employee, not the provider. as you said it gets very complex and some of these fees will not be there. it will be hard for the employee to control their costs. how are the employers going to help the employees with that? >> the good news is most of the
health plans now including united and cigna, anthem, a number of health plans on the leading edge have apps, applications that allow people to know a couple things and some third parties like compare health and others. this is a fast-moving field. whether an employee or consumer or patient needs to know, what is it going to cost them? even the data on charges, nobody pays most of those so it is a question of what do i pay as the consumer if i buy something or gonna visit, what will my plan a? because even if i might have coinsurance of 20% but if i haven't met my deductible i am going to pay basically both so you want an apps and we have more and more mobile apps on smart phones to take with you and they will tell you what it
will cost you, what will it cost your employer, in some instances there are alternatives like they will show you or tell you, you can go to a retail clinic for example land have the same thing for less. these retail clinics are very exciting because they keep the field much more competitive. those are easier to understand. in addition they include quality measures. you can frequently get reviews. some of them also allow you to make an appointment. they also have gps capability so you click on that and you will get a map. it will show you from where you are standing, they know where you are standing and say this is where you get there. this stuff is very fast moving. the key is it is what would be
paid for you as a patient and that will drive at least the individual consumer. that said, we need transparency at the national level, the policy level and corporate policy level and the health plan level to drive change in the delivery system so we don't have some of these problems where someone is charged for something they didn't get and it is a ridiculous amount and they have to spend four hours on a phone with people only open from 8:00 to 4:00 to get that removed. transparency will also allow consumers to know that when mistakes are made on their behalf that they can get them fixed and ideally send that off electronically and somebody will pay attention. >> back to the public exchanges, you said these numbers are
decided by industry, 12% of full-time employees and public exchanges and the private exchanges, wheat and see how it goes. they predict with the public exchange that employers might see these working great so more employees go to them or do you think 12% will stay pretty static? >> that is a great question because i don't think we know. first of all, think of the timing. it isn't until 2017 that the exchanges are even allowed to consider more than 100 employees. they go from 50 to 100 by state policchoice. the big question if a letter of the employees of large employers and the moving target going on is regulatory decisions and legislative decisions so it isn't clear what could happen
between now and then in terms of people making decisions about what the exchanges will be allowed to do but penalties would be paid so if for example an employer decided yes, the exchanges are going gangbusters and i don't necessarily want to be in the business of health care. that is not my business. there are so many variables each of which has multiple factors are around those decisions. most of our large employee members are businesses, very pragmatic. they know they have to live in the here and now, they have to prepare as much as they can for the future but with so many factors in play it is virtually impossible to think it through. you have got at least four years minimum before you would have any sense what is going to be
possible in 2018. the big thing we know is already programmed for 2018 is the cadillac tax. as i said already that is a big, big factor. every employer as soon as the law was signed, said we are not going to pay the cadillac tax. this is one of the factors that has been driving consideration of many ways to control costs. if they had no other reason to care they had plenty of reason but if they had no other they would carolina about that and they said that repeatedly. >> you had talked about some of the wellness benefits and how people could buy back those premium increases. a lot of employers are offering a slew of benefits and can people piece together a lot of things and at up to substantial
decreases in costs and how are they providing them? are they doing premium discounts or contributing to hsas? >> craig has the data in front of him. >> this survey did not look at wellness incentives. it did look at how employers are contributing to hsas and a number of employers are using incentives for completing benefit education courses for both hsa and hras and participating in wellness programs or based on achieving health wars. when you look at the amounts for hsas and hras the meaningful contribution to hsa was $350 and for hra slightly higher at 500. that is based on any kind of
wallace activity, participatory or achieving a health goal or something else. other surveys have looked at how an employee could earn wellness goals. the survey we do jointly with what and every year that came out in march, i believe, looked at that. march of 2013. in 2014, at 81% of employers were predicting they could use wards for individuals to participate in a health management program. >> the interesting thing historically is within the last few years many of our employers have said, along with consumer directed health plans, these wellness programs are the most effective for controlling costs. that is a surprise. a big turnaround. as recently as five or even
eight years ago no one really thought that this would be the direction people would go. this has been sort of you can look back and say why didn't they think that? they just didn't think of it. they were focusing on different things. they thought more like plan design, increased co-pays, three or four tiers and all this tinkering with benefits will change the resolve and what they realized is if we don't have people who are committed and reliving healthy lifestyles in this case in the negative living on health lifestyles we will have high costs no matter what. and keep having high costs. realizing that they need to change the delivery system, change the demand side, power and why people seek care and what they pay towards that care but fundamentally we have to have people doing everything
they can in terms of their own health and health management for themselves and their families and we will change the outcome if we do that well. that was a big change. >> i am with inside health policy. a quick question about the pension coverage. could you talk about whether you see your members or employers increasingly not offering household coverage the continue to cover the children of the full-time employees. >> i can't see that they wouldn't offer spousal coverage, basically family coverage for domestic partners, many of them cover domestic partners. i don't see the opportunity
changing. what we do see is a change in how that is subsidized or not. the case of spousal surcharge they are charging them more. specifically. but you can still get it. if you have other coverage, one area we would see is to say if you have other, there is a little discussion about light coverage. for example if you have -- this may be a bad example because under the affordable care act these things will go away but if you have a mini mad plan that was only paid $5,000 if you were sick, didn't have in patient, doesn't -- wasn't a good plan, that would not keep you from getting access to your spouse's plan. but if you have it, then there are a growing number of employers who will say you need to take their coverage but they would still cover them if they
don't have access to coverage. i don't see that changing at all, not in -- i don't want to say in my lifetime, that sounds too gramm. in a time i could imagine. any other questions? yes, sir? >> clinic information services. i came in late but can you go over what the survey results of the groups that are expected to find public health exchanges a viable option? >> the biggest one is cobra. these are people as i am sure you know, they lose their employer coverage by either disability, termination, divorce. one way or another they lose
their coverage and they can buy back coverage. we know that is very expensive. 102% of whatever was paid and you are in the plan which might have been far richer than you necessarily needs or would choose if you were on your own. it has long been the belief, a population suffering in the past because even if they took cobra it was expensive. if they didn't in many jurisdictions they had no choice. the individual coverage was like a high risk pool. it was prohibitively expensive. so the 365 retirees, obviously people who left the work place for retirement but are not eligible for medicare yet so that is a really obvious one as well. that is another expensive group because the 365 retiree is really young, probably going to be more like 55 to 60, 63, something like that.
they would be relatively expensive but they don't have any other coverage if they don't have a public exchange. that is 26%. current part-time employees 20%, spouses or dependents 15, seasonal or temporary 13%. we have had extensive discussion about excuse me, current full-time employees. i don't know if you hear them but that is more industries like retail and hospitality where they have low-wage employees so having access to the federal tax credits would be very beneficial. they don't have that otherwise. anybody else? if not, i thank you all for being here and all those of you listening on the phone, we thank you for being with us as well, thank you, good bye.
several notable people will be there including former presidents bill clinton and jimmy carter and oprah winfrey and forest whitaker and several people who participated in the civil rights marches in the 1960s including congressman john lewis. president obama is scheduled to speak at 2:45 eastern and we have all the event live right now on c-span. peer on c-span2 we will be live at noon eastern with a discussion by travel industry representatives, proposed changes to online travel purchases, a congressional internet caucus advisory meeting holds a hearing on capitol hill, the transportation department is proposing to require airlines to disclose their fees. at 2:00 eastern with a live again, and president obama heading to russia for the g 20 summit for the brookings institution, to look at issues between the two nations including policy towards syria.
all this week, 7:15 eastern on c-span2 we are featuring washington journal's spotlight on magazines. atlantic magazine correspondent james fallows wrote about california governor jerry brown. >> in our original series' first ladies, influence and image, we look at the public and private lives of the women who served as first lady during the nation's first 1 twelve years and as we move into the modern era we will feature the first ladies in their own words. >> human rights would be one of the foundation's on which we would build in the world and atmosphere in which peace could grow. >> i don't think the white house completely belongs to one person. it belongs to the people of america. and the first lady should be something of that. >> season 2 features 20, first
ladies from the beginning of the 20th century to the president including your calls, facebook comments and tweets beginning at 9:00 on c-span. >> energy secretary ernest moniz says climate change is not debatable and the evidence is overwhelming. earmarks at columbia university in new york, ernest moniz defended president obama's energy policy. his comments are about an hour. >> today i will say a few words starting out with an area in which this region, this institution, maybe all of you can help provide some leadership. unfortunately leadership opportunities that party has its genesis in the tragedy of hurricane sandy and we will come back to the specifics. we saw the devastation of many
of the region's critical infrastructures, the defects on the energy infrastructures were amplified by the into dependencies of those infrastructures such as electricity goes up, it turns out getting fuel was kind of tough and frankly that is an example of something that was not fully appreciated until the experience occurred. so in that event, which it is hard to remember it was less than a year ago, it seems a long time. the president certainly started a strong response with a no red tape edict that put the full force of the federal government behind the region's response,
critical was strong collaboration with the states. the governor, and other leaders, put together a multi agency task force, working together under the leadership of the hud secretary shaun donovan. since then the administration has maintained its strong commitment to response and what i want to come back to is that response certainly has a strong focus in terms of helping individual citizens rebuild their homes, their lives etc. something to come back to, very important component, that we have to help this rebuilding in a smart way in a way that prepares the energy infrastructures not for the last dawn but for the next storm, the
next possible major disruptions. that is where there is a chance for leadership in the northeast corridor as one starts that rebuilding from sandy's impacts. of course these events, extreme weather events are not unique to this part of the country whether it is 13 in the gulf war the southeast, mid-atlantic, recent cases in point, and in fact in the last ten years we have been hit by a nine of the most expensive hurricanes in history costing well north of $300 billion. this idea of responding to increased resilience is critical since these recent events are likely harbingers of things to come. things that will likely be repeated as carbon emissions
from human activities threaten to alter the global climate consistent with a longstanding expectation of the climate science community. clearly we understand we cannot label a specific event to warming but statistically we also know that the pattern is unmistakably along the lines anticipated for some time. today i am going to talk about the president's climate's option plan, what we are doing to prepare for changing climate, how we are working to try to mitigate its effects and after talking about that i will return to this issue of the infrastructure and the resilience that we need to in building for low carb in future but nevertheless a low carb and future in which we have to expect we will be suffering some
of the consequences of climate change. my first day as secretary, i was quoted as saying and i say the quote was accurate, i am not here to debate what is not debatable. the evidence is overwhelming, the science is certainly clear for the level that one needs for policymaking in terms of the real and urgent threat of climate change. the science community is inherently conservative in its statements about near consensus positions and distinctively open to questioning ground in data and analysis. that is appropriate but still the overwhelming conclusion certainly from the policy world is prudence demands strong common sense near-term policy actions to minimize the risk of global warming and that is what the president's climate action plan does in the absence of
legislative revenues. last week, as we know, the draft findings of the most recent analysis by the un's ipcc whether it was officially released for not, talked about again major, major issues coming up including issues like three feet of sea level rise in this century, and 95% probability that human activity is a principal driver of these issues. again the empirical evidence is clearly continuing to melt. rising temperatures, fires, drought, more intense storms posing serious threats to our communities but also to our energy infrastructure with a case in point of being the recent california declaration of a state of emergency in san francisco, as forced fires over 100 miles away threaten the power lines that provide power
to that city. as most of you know 84 present of carbon emissions are energy related. mother nature is returning the favor exacting a climate related toll on the health and reliability of our energy infrastructure. in july d o e release report detailing these impacts and here's a short list of the threats of climate to our energy infrastructure. the gulf of mexico produces half of u.s. crude and natural gas, contains nearly half the total u.s. refining capacity. rising sea levels, storm surges could cost these industries as much as $8 billion per year by 2030 in the projections. power generation units are at risk of partial or full shutdowns, less water, higher temperatures, last summer britain would nuclear plant in illinois had to get special permission to continue operating after the temperature of the water in its cooling pond rose to 102 degrees.
oil and gas production increasingly vulnerable to decreasing water availability, at the same time the u.s. is relying more and more heavily on these energy sources and renewable energy is not exempt. hydropower, bioenergy, solar power, similar vulnerabilities to water availability. the grid carries less current, operate less efficiently when temperatures are higher. fuel transport by rail and barge, growing mode for moving and conventional energy susceptible to interruption from storms and floods and as we have seen along the eastern seaboard and in the gulf of mexico energy infrastructure located along the coast at risk from sea level rise, storm surge and flooding. so in an effort to mitigate and adapt to these and other climate related impacts on june 25th president obama laid out a broad plan to cut carbon emissions, increase production of clean energy and double down on energy efficiency. because the need to act is
urgent, the president's climate action plan utilizes the substantial authorities and resources of the executive branch engage in all of its agencies in meeting this imperative. .. is an essential element for any credible response to climate change, risk mid gracious, to the kinds of carbon emissions we will need not just in this
decade but the decades ahead. in fact the first official event i attended after being confirmed as energy secretary two hours after i was sworn in an alliance to save energy meeting. i did so to underscore as a way near-term reduction and carbon emission with comp bounded benefit over time and a way to significantly reduce the energy bill of american consumers and businesses. this commitment included working with omb to expedite agency review of a new appliance efficiency rules that were long overdue. the more activist dialogue between doe and omb produced a final rule of microoven and two weeks ago a proposed rule for -- the oven rule was the first to employ the updated social cost of carbon analysis developed by
an interagency task force estimating kind of a central value of $36 per ton of co2 well within the spectrum of other analysis perhaps even on the low end. we published a schedule to put out more rules. and i think this is a new way of approaching between a d. o. e. and omb, and we're on track. we said we would have two more rules issued this month, august, and we're pretty much on track for commercial walk in cools and freezers and commercial refridge ration. bealso committed to a very important proposed rule for electric motors this november we intend to finalize all four of these resumes by may of 2014 even as we work through a now defined schedule for many more
efficiency rules. the efficiency savings my sound small, given the magnitude of the climate problem, typically it may be a few billion dollars of carbon dioxide over thirty years. but the cumulative impact is considerable which is why we need to stay on this course of putting through these technology-grounded efficiency rules for a whole range of appliances and the like. in fact, on analogies point i would raise a 2001 report from the national academy of sciences that exams d. o. e. fossil and energy efficiency port portfolio in the first twenty years. and concluded that the 22 programs the analyzed which cost about $13 billion total between '78 and 2001 yield the economic benefits of about $40 billion.
so a return on investment. i think but an interesting part of the story is the study attributed -- to three efficiency programs that cost $11 million. even relatively small efficiency programs can yield results both in economic benefit and reduction of carbon emission. regoing to be strongly focused on advancing this energy efficiency agenda in multiple do main and certainly our responsibility with rulemaking i will assure you we will maintain strong pressure in this direction. another key provision of the president's climate plan districts epa to issue rules for cutting carbon emissions for new and existing power plants. power sector single largest source of co2 in the united and such the action has been applauded by many as the most significant step the president can take to reduce carbon
emissions absent legislative action. it's also this directive also been derived by some as an action, to quote, war on coal. and the former is certainly true, that it is the most significant step the president can take right now with executive action. but the charges of war on coal i argue, demonstrate misunderstanding or misstatement of what is being called the all-of the-above approach to u.s. energy policy. the reason is that if the view of the administration, the way we are approaching this is we must reduce the co2 emissions. the president has a target -- a near term target of 17% reduction from 2005 by to 20, and we're about half way there, but the is that
all-of-the-above mean -- so all of our energy sources crb enabled as marketplace competed or its in a low carbon energy world. that's what we need by all of the above. it doesn't start by taking co2 emissions off the table. it starts with co2 reduction on the table and boundary condition, if you like, for going forward. then if you look at what are we doing about it in term of the fossil and energy source, so in the president's climate action plan, there was a directive to issue a solicitation for up to $8 billion in loan guarantee for fossil energy projects that would reduce greenhouse gas
emissions. there could be a whole that's one example. saying come forward with good idea to stretch the technology in positive l-base ed fossil-based sources reducing co2 emissions. the big one for coal in a low carbon world has to be carbon capture and sequestration possibly with utilizationization of the co2 and to be blunt there was a lot of talking the talk for many, many years because the
reality is to demonstrate at the large scale, which will be needed for large-scale sequestration, for example, these are not inexpensive projects. they are big projects. so this administration is walking the talk. $6 billion in this administration put on the table for demonstrating these technologies at scale. so this is what we mean, we're committed to the low-carbon world but weed a van -- we advance that the technology development to be competitive. obviously renewable by definition is low carbon, nuclear power as well. i can discuss them later on. you want to take head on in the issue t not a war on coal. quite the contrary, it is preparing the way for coal to have potentially a place in the
low carbon world we believe is essential as we go forward. now i'll take another one on that has been popular. loan guarantee program, and this tends to re reflects -- encourage the use of solyndra. and obviously nobody likes a project to fail, and to come on the taxpayer's tab, but since becoming secretary three months ago, i've had the opportunity to do an extentive review of the loan program, and what i have found is that this program, first, is supporting a large and diverse $34.4 billion portfolio of more than thirty projects including one of the largest wind farm, several of the
thermal energy storage systems. first knew commercial nuclear power plant in three decade. and more than a dozen new or retooled auto manufacturing plan across the country. i might mention being in new york that there are strong new york roots for this program. richard kauffman played a key role in the program. and peter davidson is coming from new york. let me give an example of the program working the way it's supposed to. utility scale projects. 2009100 megawatts of plants in the country were nonexistent. and commercial financing is particularly debt financing was simply unavailable. so using recovery act funds, the department's loan program office financed the first six utility scale pv project in the united. since those investments were
made ten new utility scale projects were funded by the private invested community precisely the outcome envisioned for the program. so i think, you know, it just had to get a kick start and going. another great example you probably have been reading about. the loan to tesla of nearly a half a billion dollars in june of 2009, that was originated, it was viewed as very risky, and that was the low point of the american auto industry. it was the same month gm declared bankruptcy, it was the lowest number of jobs in the auto industry we had in a long, long time. it was risky, but the portfolio was supposed to take some risks and push it ahead. now, of course, as we all know, tesla is certainly looking today like a great success. they repaid our loan nine years earlier than due.
they provided a prepayment premium for the taxpayer. they have been called by consumer reports the best car they have tested. not the best electric vehicle they have tested. best car they have tested. it's a little bit pricey. [laughter] for some of the people in this room, but it's a business model that is introducing this new technology. you probably also saw that it was essentially rated the safest vehicle tested recently, and the architecture of it as an electric vehicle was part and parcel of the safety success. and then in 2014, 3,000 jobs right now in california, and in 2014, starting an export business. in fact, when i was in paris a month and a half ago the american ambassador said he understood there were 25,000 orders in paris alone for the tesla for next year.
so, you know, i think this is what the program is about to do. but, of course, not every investment is going succeed. and frankly, i think to warn you about the program if everyone did, but the track record is quite remarkable. the current and projected losses to the taxpayer on certain of the projects investments in our view as a very unlikely to exceed 10% of the loan loss reserve fund that congress voted in. 2% of the overall portfolio, and less than 10% of the loan loss reserve fund. i think most wall street performers might be pretty pleased with that performance. so another key part, of course, the department of energy has been very engaged in driving down the cost of low carbon solutions.
and the department has been certainly in the forefront of the administration's attempts to stimulate the science and technology innovation required in this administration new approaches to innovation have been put -- energy technology innovation have been put in place. energy frontier frontier center, innovation hub. we are innovating how we stimulate innovation. i think these are extremely promising programs. we have seen renewable energy generation from wind and solar double, and we have seen what is very important the point i want to make is really critical reduction in the price of several energy technologies, and going to take a moment to look at those in a bit more detail. is this -- i can't see --
[inaudible] okay. so that's for wind. what you're going see is four slides, four different areas four technologies showing costs over time. the blue bars, and green the deployment. and the basic message in all casings is going to be dramatic cost reduction, dramatic deployment increases. this is wind just since 2008 wind capacity nearly tripled and the fastest growing source of capacity last year. 44% of new generating capacity in 2012 was wind. as you can see, again, going back some time dramatic reduction to where one is tabling levellized cost of six cents per kilowatt hour.
tv module, again, dramatic reduction -- this is only since 2008 deployment has increased bay factor of 10, and pv module -- they cost about 1% of what they did 35 years ago. more important, we can argue whether it's a true cost or the chinese cost or whatever,, but the fact is the module available for 80 cents a watt and reminder the long standing holy grail has been about 50 cents a watt. this is tremendous progress. in fact now t the soft costs we have to work on more to get those down. and again you see the cost of deployment. i'll pause here just to say that a hair venn gear of what is
coming is when energy incumbent start to seriously re-examine their business model in the face of what is happening. so many of you have seen today, for example, there are some -- shall we call them discussions going on between solar industry and utilities, for example, in terms of how our distributed pv system paid for electricity back to the grid, how are thing like distribution system costs shared, et. cetera, et. cetera. it was only a few years ago when nobody cared. but the message is in all of these -- i have two more to go through, you know, the future may not be always ten years away. asability a lot of these technologies are beginning to establish their positions and
certainly with policy actions on climate front will only be helped further. another example, led lights. the last five years cost of super efficient led fallen more than 85% in sales. it's a big surprise are talking off. the today we're up to about $20 million fixtures, and there are many attractions for the led. of course the problem is let's say for the 61 lightbulb equivalent. we talk about $20 for that if fixture. 25,000 years of life. 25 times that of an a regular bulb. rather than having the up front capital cost, the economics are clear. especially with using only 20%
of the power. in fact the estimate is the lifetime savings of that one 60 watt bulb replaced by the equivalent led over the 25,000-hour lifetime are well north of $100 one bulb. you have to make a $20 upfront investment. it's coming. in fact as a side i'll say this does not even count the hidden costs of what you may need to do to replace the bulb twenty five times. particularly if you have a hotel,let say, lights way up you have the maintenance person, the ladders, et. cetera, et. cetera, coming in. the osha violations. there are hidden savings that can be substantial.
finally, for electric vehicles and batteries, again this shows a reduction in the batters i ares in a relatively short time. that can go back to our tesla discussion where the cost became much more affordable, but the real message is that if we come down another factor of four, we're get together range where vehicle electricity vehicles of significant range and much more has appeal become possible. so, you know, this deployment the green curve to give you a reference point we may be talking about 100,000 electric vehicles this year. more than predicted a short time ago, and had this rate of increase in the early stages is substantially greater than that we saw for hybrid vehicles.
these are incenterly simpler vehicles, high performance, et. that's kind of a sampling of these kind of four different technology areas where i think still there often is a persistent idea these are somehow decades away. well, i think a lot of energy incumbents are beginning to think in a different way. i'm getting -- how am i doing on time? i probably should -- okay. i'm going switch to -- then a last topic. that's going back now to how i started when i discussed sandy and climate prepared pes. again, the president's climate action plan basically reflected a major -- i would call, step change in recognizing adaptation as one of the highest policy goals while favoring mitigation, but recognizing that we cannot turn
away from adaptation. we are now bringing a sweet of technology policies to meet this change. this morning i was in new jersey, in sea signing an mou with governor christie and the new jersey transit corporation. what this is, i think, a perfect model of rebuilding in ways that are going to be resilient to the future. the project, which will be designed by our national laboratory, i should say the laboratory has already designed 25 microgrids for military installations, now this will be adapting their tools to a civilian environment, a critical infrastructure environment basically the transit in the northeast corridor between trenton and newark, and at the much bigger scale. we're talking about distributed
generation assets within the microgrid clearly exceeding 50 megawatts. and the idea is, again, that this will take a key part of the infrastructure including, by the way, for manhattan. that's an evacuation corridor for manhattan if there's a major problem. it will address resilience, it will address economic benefits by providing what is in effect a smart grid. so these are the -- this is the way we are also -- and the president put forward for us to be thinking about this resilience. it's not just about building sea walls as important as it may be. or about elevating structures close to the sea, but it's also about building smart as we address the infrastructure and use it as perhaps an opportunity to develop the 21st century
infrastructure. fact the -- it should say here in new york my understanding the sea level in new york harbor was about a foot higher than it was a century ago. we begin to understand the sensitivity to all of these climate actions, and we applaud new york for a number of steps it's taken, including, by the way, establishing a green bank for efficiency and clean energy technologies. i would just add that we are also going to focus in d. o. e. on the coming years on more work with the states because we believe this is a critical area for testing things out for drawing upon the creativity that states and cities have been showing in term of energy and climate policy.
so finally i'll just thawed when it come to emergency response and and this adaptation part of the agenda, the department of energy for our own responsibility is head of what is called emergency support function 12 under the fema. basically as the lead department for addressing energy infrastructure issues. we already operate the northeast heating oil reserve. we operate the strategic petroleum reserve on our pneumonia already weapons activity that david alluded to. we have had long-stand operational emergency response for nuclear incidents for controlling nuclear weapons terribles globally, but this is new step for us in term of a major operational requirement in the civilian sector, if you like, working with all of our
energy companies. and to do -- and partly to do this, we have the department of energy of a reorganization looking at how our undersecretaries are deployed basically assigning one of our three undersecretaries to focus on management and performance. all of these operational questions are looking to upgrade our focus on that. i should add in term of the grid, and resilience, of course, extreme weather is one issue, but in addition things like cybersecurity are an increasing threat. one to which we are also devoting much, much more attention. i think given the time i'm going pretty much end there. the i would be happy to take questions on the energy review, for example.
but i think the message is i hope clear. one, we are -- our program in energy cannot of energy is clearly directed by the president's climate action plan. that is our focus. to do so, we will upgrade our e -- efficiency work. we will continue to help drive down the costs of low carbon alternatives across the board. all the above. as we support also the work of other agencies like the epa in addressing climate. but at the same time as the president said, we have to acknowledge that we are seeing and will see more, frankly, of the impact of climate and so we must also look at how we develop our energy infrastructure for that future. an infrastructure that serves
our economic goals but also provides robustnd and resilience extreme weather events. with that i thank you for your attention. and happy to take some questions. [applause] [inaudible] we're going come to that. maybe we can do it in the right order. about half the card we collected were on that question. we will come to it. [inaudible] so we have about just under twenty to twenty five minutes for questions with secretary. we have been collecting cards. about half of them were related to hydraulic infrastructure -- frackerring. let's start with that. there's a lot of concern here around the country also here in new york about shale gas
development. what is your view of the role that natural gas plays in a low-carbon economy. how shale gas can be developed safely. what action the u.s. taking to get there. >> okay. so first of all, it is a fact that in these last years the natural gas revolution, shall we say, has been a major contributor to reducing carbon emission. the president has a goal, as i mentioned of 17% by 2020. we are about half way there. about half of that is because of the institution of natural gas for coal in the public sector essentially driven by the market forces. the in my previous life when we did a study on the natural gas,
the -- if you ask the question upfront is natural gas part of the problem or solution for climate change, we reached a conclusion, yes. [laughter] that is certainly in the near term and for potentially for some years out the institution for coal combustion would be a major contributor to reducing carbon emissions. but in the longer term assuming we are cracking down hard on carbon emissions, then eventually gas itself would have to have carbon capture or it would be too carbon intensive. that's really the classic definition of the bridge to the future, and we need to work on those technologies. now next question is there's been a lot of controversy around
methane emissions, and first of all, the again in the president's climate action plan, this was specifically a callout for addressing what you might call the the nonco2 greenhouse gases. hydroflora carbon. we are working. we had an agreement with china to work on that. and methane. and on methane we currently have an interagency group formed the president's direction headed by the epa including the department of energy, department of interior, and department of agriculture. for example, to look at methane emissions. we're in close contact with the environmental defense fund, of course had a major study of their own on methane emissions. the -- we will see what comes out of
that. [[inaudible] >> we're going it move people from the room if they shoutout. >> the data currently look as though the they are more on the low side of the estimate in methane emissions. we will -- >> will you please let the secretary answer your question. >> he's talking about something i'm not talking about. [inaudible] >> we're going -- >> [inaudible] the question has already been asked and the secretary is answering it. let him answer the question, okay? >> the current data suggests it's an incorrect statement. we will be exploring it. and secondly we will expand the study from the narrow focus around emission at the well to emissions and including in the transportation infrastructure. the other thing is in addition in term of methane production at
the well, of course, there are technologies that are increasingly being used to capture the methane, and in fact as a side they can be used environmentally in the sense that, for example, it's a lot better to use natural gas engines to drive the fracking fluid than it is to use diesel engine with a local air quality issues. that's a second point. there was a third point. i'm trying to remember what it is what now. [inaudible] >> we can -- >> i forgot the third point. anyway. that's where we are. and again, there's no issue in term of co2 emission that natural gases has -- i know what the third one was. then comes the issue of the safety in term of fracking
itself. and there again each of the issues to be addressed i would argue has clear solutions but the technologies -- the issues being manageable i've always said is not the same as being managed. we have to have con consistent application to the best standards through regulatory and other approaches. so i think that's the overall program, and that's what ere doing. >> let me broaden the question. there are questions about natural gas and fracking a lot on the cards and fugitive methane. there are some more broadly about all of the above strategy an the questions are why all of the above. why not from cuss on renewable. you spoke pass --
the administration welcome dramatic increase in oil and gas through new unconventional technologies here in the country. i think some people view those things as having some tension between them or hard to reconcile. perhapses you can talk a little bit how you think the public should understand how those things fit together. how they are consistent -- what is the right way to think about being serious about climate and the u.s. has a foacial significantly increase to oil and gas production. certainly. >> first of all, let's start with, again, the ground truth. 80% of our energy today is positive l derived. the transportation sector is still today okay within 10%
ethanol, but largely is dependent upon oil as the transportation fuel. now i talked here about hopefully going to a future where we see more electric vehicles using low carbon electrician going forward. the reality is in the energy business, it's extremely hard to see very, very rapid changes in the deployment. we have to be practical, pragmatic, totally committed to reducing greenhouse gas emissions, doing so and accelerating that to within we can of the current realty. now let me go to your specific questions about gas and oil. firstful all, i would say there they're a bit different
question. on the oil side the production has gone up substantially. in fact, in the last five years, the added capacity in global oil production in the united has been by far the biggest contributor. in fact bigger than the next three combined. that's mainlily from the unconventional type oil. here what we're doing what we're seeing here is a station for import. this has significant economic benefits. it's not changing the carbon balance specifically. it is certainly reducing our balance of payment substantially. it wasn't long ago we were spending a billion dollar a day on imported oil. that's now at the lowest level of many, many years and our production at the highest level of many years.
in the spir of how i define all the above, but we are working assiduously in multiple dimensions to reduce oil dependents. the president pushed the unprecedented cafe stable. a doubling of fuel efficiency by 2025. that's already having an affect. -- effect. we are working on next generation biofuel, and we are working on as one saw, especial arely the batter technology that is key to electric vehicle penetration but beyond that other things -- et. cetera new materials which, by the way, was part of the tesla safety success as well. we are producing more oil, we are reducing import, and working to reduce oil dependence at the same time. on natural gas it's a little bit different.
maybe i should have said if you look at the cost of removing the marginal ton of co2, you know, it's broad term probably lowest for efficiency. next for electricity, and highest for transportation. that's the one that is going to be a little bit harder, frankly, in term of getting this transition. natural gas serves three major sector of the united states. almost equally. meat -- heating, electricity and industrial applications. the on the electricity is where we are seeing the large growth because of the low prices. and again, this has been beneficial for our carbon e division. it's why we are the lead industrialized economy.
going forward again on this we are pushing solar, wind, we are just now going to go to the first support for offshore wind, for example, a place where cost reduction is required. nuclear provisional guarantee to see if new nuclear power plants built in the united states come in on budget and are reasonable. even as gas takes a more prominent place in the mix. last our follows -- flols if i. we have to -- to be pragmatic and keep working on those alternatives that will support a very low carbon economy in the future. >> i'm going take the questions roughly in the order of preponderance. they sort of stack up. shale gas development and fugitive methane was the largest stack. >> like two kilograms worth.
>> the next largest is on the export of match really a gas. -- natural gas. i suspect you may not be very specific in answering this question. [laughter] one -- the question along the line of how much and by land and how many days until the next permit. and assuming you may may not answer that question, maybe more broadly i'll say the two recent order lake charles approving natural gas who were quite forceful in explaining why the -- were in the public interest. they talk about the need to look at cumulative market and changing market condition. i don't know if hypothetically speaking you talk about the things you are monitoring and looking at. what sort of scenario in the future might lead to one a different conclusion whether it's in the publics' interest. >> it's a excellent question. next. >> okay. >> no, no. i think first of all, the audience may not be quite as
familiar. the cannot of energy is called upon to license applications for the export of natural gas. to nonfree trade agreement countries. for countries with a free trade agreement it's essentially automatic unless there was some clareing issue to make it not in the public interest. haas sort of like mexico in nafta. south korea is a gas user and free trade agreement country. most of the market financial gas are countries who do not have free trade agreement with the united. europe, japan, india. we have to judge on those. as jason implied the department issued three licenses. one is final. i should caution the statement of fact that the last two that were just issued and the last few months are provisional licenses. they still need go through the
process, for example, which is run out the firk. environmental review is still needed to come back for a final license. in the first case, the first license granted,ic that was about year in between the provisional and the final license. and even then that project is still not exporting. it's still, i think, a couple of years away from export. they are large capital investment. a billion dollar scale, and one has to arrange customers and suppliers to make project go. going forward, what we have said it was established before i was secretary that the we evaluate the applications, case by case roughly speaking in the order submit the. there's a published order.
everybody knows where they are. and we are working through the next one. there's no secret. the next one is cove point. you can go owrn website in maryland. the only one of the east coast and we're now evaluating that application. as you say it's a public interest criteria. it's the second stage. impact on the economy. the market conditions are an issue. we will monitor that. as you say, it is published that the department will be looking at market conditions in the context of cumulative commitments to ex-- export. those are the ground rules kind of repeated what you said. i will note an obvious issue that granting a license isn't the same as having the gas exported. that's going to be something
that we have to face at some point down the road in term of how we evaluate those probabilities together in term what it might do with market impact. >> we have ten minute. there are several questionses about nuclear energy. you know a little bit about that. what do you think should be done to handle the indian point nuclear plant. more broadly what is stopping us from establishing more sources of nuclear power. >> i'm not going comment on that plan specifically. i must say i probably don't know enough about the specific of the indian point plant. if i take the bigger picture, there are several issues. one is as i already alluded to the department did issue a provisional $8 billion loan guarantee for the construction
of the first two new nuclear power plants in georgia. there are four next half generation, i would say nuclear plants being built. they have some new safety features, et. cetera. i think the big question with those plants is going to be do they get built on budget and, you know, more or less on budget and schedule. if they do, i think they will probably be a relocated in some places for new nuclear power plants. if they have bad budget performance as did some recently in europe, i think it will seriously cloud any future for such gig watt scale plant. the latest report from georgia
and south carolina are encouraging. they are in the early stages of the prompt. the second issue, of course. is the post fukushima. there are clearly a number of steps they will be taking for licenses and licensees. and, you know, clearly there will probably be some incease in operating cost in responding to regulations, for example, maybe a requirement for periodic seismic review as opposed to one-time seismic review and various other issues how spend few the store, you know, we still don't know the full extent of what will be required. that will do some at least marginal operating co. the third thing and fourth things. the third thing i would say is clearly a nuclear waste back end remain an issue.
core recommendations need to be followed. those two are principally a consent based process for nuclear storage facilities, and b a dual track of consolidated drink cask storage people belie under federal patrol. and the agree logical disposal tract. the fourth nuclear point i would make there's a promise i emphasize a promise at the stage about kind of a new generation of reactor called small module
reactor. they are smawmer units. maybe 200 megawatt maybe smaller. if these are economical. they generally have very attractive safety features, and they could be an important part of the nuclear future. we won't know until we build some. department of energy provided some assistance to move one and soon a second and possibly a third to licensing. and the target date would be a first module reactor operating in 1022. there. there particularly about what the change in the north american emergency landscape means for american's place in the world. one of the questions is in the past the u.s. has conducted a defensive energy policy blocking and tackling countries like russia and protecting country in the mideast. there's an opportunity to be
more proactive. can you talk about what the see as the geostrategic implications of the changing energy picture in the u.s. what the priority are. you have announced a reorganization. what -- how the work will be managed moving forward. >> first of all in term of the current situation with regard to the increasing gas and oil, the -- first of all, the substantial increase in natural gas production in the united states has already had geopolitical consequence even though we haven't exported anything. basically because all the lng that was supposed to be imported went elsewhere to like, europe, for example. now in the future, i say here i would go beyond the united
states it is a big unknown how much and when. certainly if the world's unconventional gas resources are developed aggressively nominally resource in place in china is bigger than the united for shale. argentina has some very attractive looking reservoirs. eastern europe -- now a lot was enthews yaysic a few years ago. a few aboveground reality have taken a little bit of gloom off in some places. there's poacialt for dramatically shifting the flow of natural gas globally, and that will play out over the next decade, i would say. with regard to oil, i think the -- again the united becoming a
large more significant producer is certainly plays in here. i remind you i think sometimes especially on the oil side, the assumption of the geopolitical shift because of that and perhaps overplayed. i would note, for example, that we get little of the imported oil from the middle east. it doesn't change our security posture in that part of the world. that's just a fact; right? we have many more security equities than just oil, but secondly, the united states has unique national security and foreign responsibility in the global order, and to the extent
to which our key al -- allies are subject to strong energy security problems that inevitably influences our freedom of action in national security and foreign affairs. i think it's a more complicated story but bottom line unconventional resources are developed strongly around the world other than the next decade there's no doubt global marges -- markets will change. infrastructure requirements will be different and we'll see how it played out. there are several questions how the administration thinks about incorporating can you talk about what the department is taking to make the grid capable of taking more renewable on the policies to drive out?
several thing. first of all, we are looking hard, in fact right now refreshing a road map in term of utility scale storage technology. which obviously could have an enormous impact. right now in term of the grid itself a number of activities i'll mention one, for example, the using mainly using recovery funds the department has supported the deployment of a substantial number of what i call phasers in the transmission grid. potentially making detail phase measurements, and this is a seeing issues there -- , i mean, collecting the data, of course, and analyzing the data can be a way of getting a very, very strong signal about impending problems, and giving one the opportunity to address them. that's one example of what i
call smart technology we try to help deploy actually an example i already mentioned in my remarking was today's this morning's event with governor christie in terms of actually trying to move forward building a physical microgrid of nontrivial scale there. it will, by the way, include -- assuming the project goes full to full construction, it will include a lot of inte tbraition and renewable in that microgrid as well. i think the -- there's a much bigger story in terms of especially remote large scale renewable wind and solar, and there. it's a big infrastructure issue. there i will just advertise the last part of the talk that i did not give. we are starting again it's in the climate action plan something called a energy review. the department of energy will be
the executive secretary for an effort that will spanned the entire administration. the focus will be on infrastructure. how do we evolve a 21st century infrastructure and one that is integrated that has got resilience to natural events. cyber secure and can integrate large scale renewables. and large-scale distributed generation to the transmission and distribution systems. [inaudible] we're out of time. [inaudible] you said there was a part of a talk you didn't give, and there are enough cards here to be able to talk for another hour. hopefully you'll come back and spend more time with us again. as you can see there's a a lot of the interest and augusts on the issues. we appreciate you taking time to talk with us today about the truly important issue that are
at stake for the u.s. energy outlook. i want everyone to please join me in thanking the energy secretary for being here today. [applause] as i said, we have many more events coming up this follow. follow us on twitter. please remain seated until the energy secretary has left the room for about twenty more seconds, and then we can all exit together. thank you again for coming today. live here on capitol hill a couple of minutes away from a hearing talking about online travel purchasers. transportation departments consider a bill that require airlines to disclose the prices for a lot of those fees they have. a hearing scheduled to get underway a few minutes from now. we'll have it live for you on c-span two.
we'll show you what is going on the national mall and the lincoln memorial in washington, d.c. the commemoration of the 50th and verse i are on the march on washington where martin luther king delivered his "i have a dream" speech. you can see that's representative joaquin castro from texas. gray skies here. a little drizzle but large crowds onhand. we anticipate remarks from former presidents jimmy carter and bill clinton. and organized ringing of church bells about the same time of day that reverend king delivered his call for equal rights. at 2:45 eastern we'll have live coverage on c-span of president obama making remarks. in fact, we have live coverage of the entire event throughout the day over on c-span. at 2:00 eastern we're live on u.s.-russia relations. president obama heading to russia next week for the g20 summit. the brookings institution will take a look at the issues
between the two nations including policy toward syria. this week about 7:15 eastern on c c-span2 we feature washington garble -- journal spotlight on magazines. tonight on booktv prime time fairs and festivals will begin at 8:00 eastern with the harlem book fair. and the los angeles festival of books. we'll follow him and lynn olsen who wrote "those angry days." booktv prime time tonight at 8:00 eastern. there are several types of bullying. the favorite is racial bullying. they love it. it's the favorite thing. left's philosophy is based almost solely and completely at this point on the idea they stand up for victimized group.
[inaudible conversations] >> so we're waiting for the moderator, we're told. this is some travel industry representatives to talk about proposed changes to the online travel purchases or to yours and mine online travel purchases at a hearing. the transportation department considering a rule that would require airlines to disclose the prices for many of the fees their distribution partners charge so travelers can purchase tickets more efficiently online. this is the congressional internet caucus advisory committee holding the hearing, and it looks like the
moderator's there, so our live coverage continues here on c-span2. [inaudible conversations] [inaudible conversations] >> hello, welcome. thank you for coming. today's event is called buying your next plane ticket online, how can the internet make travel more efficient. people that schedule their members' flights back to the district, if you're going to
visit people on august recess which you clearly, the people here, have not. you need to buy your plane ticket, and this is an important issue that everybody deals with, so we thought it would be good to have a recess flash briefing on this topic. to do that, we have a great panel of people to debate this topic and a great moderator to facilitate that along. really quickly, i want to thank the congressional internet caucus and its cochairs, congressman bob goodlatte and anna eshoo as well as senator thune and senator leahy on the senate side who help us put together these briefings that debate key issues without taking any positions on them. i think there's a lot of value in both sides of the debate, and we kind of host those so you can make up your mind on how you feel about these issues. so with that, let me just thank everybody and introduce the moderator. rob has covered consumer technology issues for many, many, many years. he's probably older than he looks. he's been doing this stuff so long.
and he freelance journalist, he writes a column for "usa today." i used to read him religiously when he used to do the tech reporting for "the washington post". really a great person to moderate this discussion and kind of tap into be how consumers feel about this issue. so let me introduce rob who's going to moderate the event. thank you. >> all right. thanks, tim. see, i thought by -- you mentioned, you know, not taking an issue, although i'm paid to have opinions on everything, i'm really kind of on the fence on this mainly because i've realized that i'm not actually normal. i overthink the process of buying air travel. i'll check air fares at kayak and the airline zone, i'll check out data at seat guru, connecting airports, maybe start a discussion on flier talk about this, but i recognize some people have actual lives, and they want a simple way to buy a ticket at a reasonable price for a comfortable flight. so i thought we'd get into it by starting with briefly telling
how you came to this issue and either what's the problem you're trying to solve or the problem you're trying to stop from happening. you can start, andrew. >> sure. my name's andrew weinstein, i'm executive director of open allies for air fare transparency. we're a coalition of about 400 organizations and companies that are involved in travel distribution. so our members are everyone from the travel agencies, the brick and mortar ones, in fact, more than half the largest travel agencies in the country to the business travel departments that book travel for corporate travelers to the online travel companies that people in this room probably use that book their own flights to other players internationally as well who represent similar constituencies, and the gds systems which are systems at the center of a lot of this travel distribution right now. our organization has a single simple goal. we want to make sure that travelers have the ability to see and compare all of the
prices for fares and fees that they get. so that when you're booking a trip, you can do on apples to apples comparison and say i'm going from point a to point b, i want to have these options, and i want to know how much it's going to cost me across the different airlines that offer that service. and our members are working through the coalition to try and achieve that. now, the problem with this is one way is that the very system of transparent services has developed over the past 20 years. it's opinion an explosion in new -- been an explosion in new innovation and technology. who in this room has used orbitz or one of the sites to book a trip. i assume it's pretty much everyone here. the other challenge you probably face at the same time, though, is you may have gotten to the airport or gotten to the tail end of a purchase and realized that there's additional charges associated with the flight you didn't realize were there. so that could be baggage charges, priority boarding, a
flight change fee that you didn't know you'd incur if you wanted to go at a different time on that same day, and those fees have head it very difficult for travelers to tell how much it's actually going to cost them to get from point a to point b. the airlines, and i don't want to speak for my peers on the panel, but from our perspective, parking lot of the reason that it's gotten more difficult to tell how expensive it's going to be to travel, to get to your destination is that the process in the airline view has become what they call commoditized. so i'm going to quote just one sentence from the ceo of the international air transport association, one of his colleagues is represented on the panel. they're saying that the current model is focused only on finding the lowest ticket price. this has result in the commodityization of air travel. for airlines' perspective, they're basically not able to charge higher fares because consumers are able to see every fare out there, and they often pick the cheapest because they're traveling for value. and airlines are looking for a
way to increase the costs they can pay -- charge for the tickets that they offer and the fees that they offer. we think that's the crux of today's debate in a couple different places. one in terms of all these new fees you're paying and also in terms of a plan that you may hear about called the new direction capability of ndc which is a proposal the airlines have put forward to try and change the way that travel is distributed today n. both cases, our fear is that what is occurring is not the personalization of travel which is a phrase you'll probably hear from my colleagues, but the personalization of fares. so that your fare is different than your fare, so that the person sitting next to you in the room today if they did the same search on the same day at the same airport might end up with a totally different price because the airlines think they're willing to pay more. our members are opposed to that, and we think that there's a better way to continue to foster innovation and new services and new incredible ways for travel,
to search and find travel in cooperation with the airlines without having to lower the veil of paucity over the fares and fees that you pay. i'll wrap up by saying a point that may be missed earlier which is we're partners with the airlines. we want to work with them. we can't be in business without them. our members serve as the interlocutor between the flights and the purchaser, the consumers for the majority of tickets sold today. we need them. we think they need us. we want to find a way that a actually works for consumers and for business travelers to be able to efficiently, competitively, transparently search for the frights that they want -- flights that they want while also increasing the number of flights sold for the airline. >> all right. shane, your turn -- sharon, your turn. >> my name is sharon pinkerton, i'm the head of policy for the airlines for america, and we represent all of the major u.s. airlines, both the network
carriers that you're familiar with -- united, jetblue, american -- and also low cost cares -- carriers like southwest, etc. i'm glad you asked the question kind of what's the problem and why are we here today, because i'm interested to explore that question a little more. airlines, obviously, are in favor of transparency. why is that? what's our goal? we want to sell tickets. we want people to travel. you know, airlines are an incredible economic driver in this country. we contribute a trillion dollars to gdp, ten million good-paying jobs and, and beyond just our economic contribution, we enable things like you've gone home to see families, friends, celebrate birthdays, anniversaries. we provide an important medical service this carrying life-saving organs to folks. so i think a key context of all
of this discussion is what airlines and aviation do for seem and their economy and the fact that i hope we're together in our common goal of wanting to grow the industry. there's good news for consumers that i want to share with you guys today, and that is that air fare has never been such a great bargain. if you look at air fares your average domestic round-trip ticket in 2012 and you adjust it for inflation, it's 15 president -- 15% lower than it was in 2000. when you add in the ancillary fees that andrew talked about, it's still 10% lower even including those fees. so i urge you all to take advantage of what is a great bargain right now and a good time to fly. we at airlines for america have been talking a lot about a national airline policy. again, what is it that we're trying to accomplish? we'd like to have a rational tax
structure in place, a rational regulatory burden with. we need to be able to compete globally. we want to get next gen done. you guys have gps which enables you where you want to go. it's not the system that is working today. airlines wallet to move off of radars and get to that gps system, and finally, we want to do something about oil prices. so that's really what we're all about. i like to frame this debate with the gdss a little bit differently than what you've heard. andrew said he represents 400 countries, and that's -- 400 companies, that's absolutely true. but i think full transparency, the real debate here is between some global distribution services, companies, and that's saber, travel port and am dais to saber and travel port own and control 90% of the distribution
market. so that when we sell our tickets through a gds, we pay a fee. as in, consumers pay a fee. so that's about $7 billion a year. that we pay to gdss. so in terms of what this issue, i think, part of it is is about, is what can we do to become more technologically efficient, innovative and bring that $7 billion cost down, quite frankly. because, ultimately, as you guys know, airlines run on a very, very thin margin. we made 37 cents a and in 2012 -- a passenger in 2012. 37 cents. and you might say, well, i don't care how much you make, but actually you probably do because when we're able to make more than 37 cents, what does that mean? that means that we can do capital expenditures like buy new planes, we can provide training to our flight attendants, we can put wi-fi
on the plane which is really cool, we all like that -- >> you replace that cd concourse at dulles while we're at it? >> you know, because it's too far to walk? >> it's really awful. pretty crummy place to wait. >> we spend a lot of money on airports every year. but that -- therein lies part of the rob is that we have between -- the problem is that we between the $19 billion in taxes we pay, the incredible amount of regulatory inefficiency out there, we need to control costs and bring costs down so we can spend hundred in the right places. so what we would like to see is instead of the regulation that the gdss have proposed -- and, again, these control 90% of the market -- they have a way of providing technology that we think is one way of doing it, but we also would prefer to have a more open architecture in which there are many folks who
can to to vied the distribution -- who can provide the distribution of our product. you know, it's funny. people say airlines don't want to distribute our product. we absolutely do. why do we want to distribute our product? because we want to sell it. so it wouldn't make sense for us to try to hide our product. we want you to buy our product. lots of cool software out there, web sites, itasoftware.com, it's a great site for going and finding the best price. but we think there ought to be competition in ma that market, and what the gdss have proposed through dot's rule number 3 would essentially narrow the focus down to one way of providing technology. we just want to open it up and have a lot of competition in that distribution marketplace. so i look forward to the debate. >> all right. and you two get your say too. >> great. looking forward to it.
i'm charlie leoca. i started the consumer travel alliance back in 2009. before that i was a journalist, i wrote a book called "travel rights" which is probably the only book that's been written about the rights of travelers whether they're flying, renting cars, using their credit cards, going to hotels, dealing with organized tours and stuff like that. and someone asked me whether or not i'd like to start a nonprofit and work for consumers here in washington. and i said i'd like to, but be i'd kind of like to eat too. [laughter] so i went ahead, like a fool, and started this thing. and we've done a real good job inside the beltway, and now we're building out. we're building membership out into the country. we've got about 37,000 people signed up to our fuse letters -- newsletters that we can reach out to to get a pulse pulse of what's happening in the travel industry. when we talk, when sharon and andrew speak, you know, they're
talking about the airlines, they're talking about the gdss. and my job is to keep the focus on consumers. i said, and we talk so and so's got 90 percent of the market, 85 percent of the market. well, you know what? consumers have 100 percent of the market. we're the ones that your members and your bosses all are really serving. and so what i've been doing here is i've always been trying to get as much price transaren't si as -- transparency as consumers can get. i think that i was going to say that we all remember when expedia started, but i might be older than, i might be a little bit older than you guys. [laughter] but when expedia came into the market, all of a sudden everybody said, wow, look at this, i can see all these prices. we had expedia, travel osty, and it was a new world of setting up your own pricing model. and what's happened is over the years -- and especially starting
back in about 2008 -- the airlines started to do what they called unbundle their service. in other words, you used to be able to buy an airline ticket, and in the airline ticket you got two bags, you could talk to a real person on the telephone; you got a seat reservation, and you got from d.c. to we yore ya -- peoria or wherever you were going. all of a sudden they said, well, you know, we're going to take away something and only because we want to give you choice. guess what? have any of you seen the air fares going down? no. and when you hear the story about, oh, it's such a great bargain, you know, they forget to tell you a that, you know, you can buy computers now for 10% of what they used to cost. a eye lot used to only be with able to fly maybe 25-50 people in the old twa constellations. today that same pilot can spread the cost over 300 and something people in larger aircraft. so that kind of an argument about the cost of travel still
being low really doesn't ring true unless you really look at it across the board and all the efficiencies which have come into the system so far. so when we debate this stuff and we talk about different issues, my single focus is on getting consumers to be able to know what the total price of their ticket is. there's no reason why we have to go one place and buy the air fare, go somewhere else to buy the baggage fees, go somewhere else to get your foodyou want that or set up your computer internets and be -- and to on. if the airlines were interested in selling everything, they would release these fees to every part of their distribution network. they wouldn't keep it to themselves. and they would be able to make much more money. every study that's been done shows that when consumers are
given an option of buying or upgrading, a lot of them do. and, therefore, everybody makes more money when you have more opportunities to do that. and so that's what we're looking at. and we're supporting action by the department of transportation. and during the faa reauthorization bill debates and discussions two years ago, we were active in trying to support the same kind of thing. so, okay. so we were active in trying to support the same kind of price transparency. and that's what we're trying to move forward on. and the in-fighting between the airlines and the distribution network shouldn't affect consumers. consumers should know what the total price of the ticket is wherever the airlines decide to sell their ticket. and that decision is totally up to the airlines.
they can decide we don't want to sell it here, we do want to sell it here. but wherever they do that, we're trying to get consumers to at least know what the total price is. and technology exists today to do that. we need to get the data released and freed. and that will then allow technology to move forward. >> okay. matt, you get the last word. let's not get too into the weeds about cost on every mile on a constellation versus an a-320. [laughter] >> okay. i won't do that. i'm matthew general decision, i -- jennings, i run all of the legislative affairs, and we're a global trade association. we have about 240 members, all of which are airlines. and there are a lot of different things that we do as a trade association, but one of the big things we do and have done for many decades is standard setting. so the conversation about distribution is actually a lot more fascinating once you get past that word, distribution, that doesn't sound that
fascinating. today we've seen a major shift in the way air fare is distributed, the way you shop for airline products. forty years ago in deregulation, you went from the cost-plus model and basically went into the same sort of thing without the guarantee of the plus. and so for years it was competition on fares and schedules. i don't know if anyone has watched the airline industry over the last 40 years, but that didn't really work so well. lots of airlines went in and out of bankruptcy, and that model had to change. and so that was where we got unbundling, this concept that getting on an airplane is a product, and there are other products that airlines can create and sell. and now the merits of that, i mean, you see to do a4a released a statement the this week that in the first half of this year the u.s. carriers having made $6 billion put all $6 billion back into the customer experience. and if you fly a lot, like me,
from one month to the next you're seeing major, major changes in the offering onboard, in the cabin environment and the experience. and this is all because of a need to compete on more than just destinations, on more than just base fares. because as sharon has said, it's been a race to the bottom in fares. if you look at over the last 40 years, i mean, the best year, i think, the margin was 3%? i mean, that's -- it's as close to a perfectly competitive market as i think you might find in the economy today. so what is nbc? the easiest way that i talk about this is -- and no surprise, and as andrew said, shopping for air fare in the world of unbundling is complicated if not virtually maddening. you go to an airline web site, and you see lots of different information about the aircraft, the onboard environment, all of the various amenities, the other products, prices and things like
that. but you have to go to each individual airline web site. if you go to an orbitz, travelocity, kayak, one of those and you enter search, it's great. you get feedback of schedules and fares ordered lowest to highest price. but travelers today want other things, they need other things. and you can't actually build an offer that says i need a checked bag, i need wi-fi, i need all of this other stuff. how can i compare when i can't see that information here? and we agree, i mean, it's us frustrating, and it's difficult. as rob said, he's going to myriad different web sites trying to find information that you ought to be able to get in one place. so why? it's not a lack of desire to sell these products through all of these sales channels. i mean, in order to sell a product, you have to be able to market that product. it's a technological issue. for 40 years we've used the data
transmission standard called edifact when there were schedules and fares and not a lot else. being that old, it is incapable of transmitting and commune candidating the kind of information -- communicating the kind of information and product detail that now exists. so in order to push that content out to the indirect channel, to the online travel agents, to your traditional brick and mortar travel agent, you have to have a new technological solution to do that. that's called xml which, basically, runs the world; your iphone, your blackberry, your android device -- >> mark-up language. >> yes. it runs everything. and it is dynamic, it is robust be, it is open source. it's really the wave of the future in communication. we've seen this start to permeate the air fare market. now, we're behind. only in our market would we call a picture on a web site revolutionary. but, i mean, considering what we've been doing for four years, it really is. and what you get in this
scenario we've seen time and time again and the reason we set standards is everyone is sort of doing their own thing. each airline's kind of got a different format for xml. and by format, i literally mean basic, how the date is presented. is it date, month, year, does can it go first, second, last. all of that minuscule information that you don't think about, but that's part of the communication. you have to be able to understand that in order to make a request, make an offer. and what have you. be so with proprietary solutions, you're still going to get xml. you're still going to get this move to more product offerings throughout all the sales channels. but be it will happen more slowly. nbc i basically liken to a travel converter. i'm sure everyone has one. you carry this big, clunky thing that's got a bunch of pens and rods sticking out of it, and if you're going to africa, you need a completely different set
compared to the e.u. or asia. and wouldn't it be great if you could just take one plug and plug it in anywhere in the world? that is, basically, what nbc is. it's not a business model, it's not a pricing model, it's not some revolutionary new way to create a market. it is, in effect, a standard way to plug in to one another so that if i'm a developer and i can talk to one airline, i could talk to all airlines. which means that i could distribute all airlines' content and all of their content because i'm now using xml. and that really is, at its base, the purpose of nbc. it's about allowing airlines to actually market all of these different products they've created and are trying to differentiate themselves with to consumers. and it's about consumers being able to actually compare transparent prices which today you cannot do. >> okay. so there's a couple different issues tied in with it.
i think it would agree it'd be nice to know what we're going to have to pay without cross-referencing, you're advocating things like similar lines, or are you making moves toward that direction? i guess you'll be able to book an economy plus seat through travelocity? >> yeah. actually, a very quick point on xml, and i think i'm going to move to what i think the debate is really ant. xml is a computer language, a very good computer language. be many of our members use xml a lot, and they use it to communicate with the airlines that are the members of the organizations sitting at this table. in fact, we did a survey of who's best prepared to use xml, and the results were that the members, the information providers who are members of our coalition are better with prepared right now than their members. the airlines said they're not ready to use this as much as we are. but it's a red herring in this debate. the resolution, what aiata
proposed is not why we should be able to use xml. that's only been kind of -- that argument has only emerged after the initial filing when the initial filing prompted roughly 400 organizations to file their own mostly complaints with d. o.t. about what they were filing. what they filed was a totally and radically different approach to the way that you shop for your plane ticket as a consumer. ..
makes it harder to tell what you're paying for each piece of that trip. so rather than just saying a fly from point a to point b. it will cost $300 you might get an offer from airline this as we will give you priority boarding and lounge access and exit row seat for $600. you might be able to uncheck some of those, you might not, depends on how the system is configured. but from the consumer perspective, it takes a confusing system and does to bad things. it makes it completely impossible for the consumer to tell apples to apples comparison for me to fly from point a to point b. and then i can put in the things i want to have with that trip. secondly, in addition to transparency of that flight, it's difficult to tell what the
actual price of the causes going to be, it means that the airlines are charging a different parties for each person who does that search potentially. the personalization means if they think you are price and senate business traveler they can potentially charge you $200 more than what to present for the person searching next day. >> so this is an interesting case. because as we're talking about this before, you know, there's been no improvement anonymous purchase tickets sense i guess you could board a people express but in 1980 and pay for your ticket on cash -- in cash on board. certainly if you're shopping at an airline so inside right now, presumably you're locked income you want to see if, in fact, you will get a better deal. you want to know what you get if you happen to have elite status. so is that a proxy for what your wordings is going to happen or
is that already here? >> i had a baby last week and my mother-in-law is 100 north carolina, which i have feelings about -- >> good luck, man spent issues watching, i love you, ruby. but when he did a search for the airfare from d.c. to charlotte, presented affairs in an aggregate search engine. i chose the flight i wanted. i got to the registration screen and told me i couldn't reserve any of the seats on the plane without paying an additional fee for the seat. nothing on them. i don't know whether they charge me extra for those seats because they figured out who i am and some become my information and said his is a guy who might be willing to pay more for the seat. we will charge them to get this seat. or whether this is something they do for everybody. but because the pricing isn't transparent, wonder everything charlie said, what the airlines are proposing is we will do away with all the pricey after so everyone can see what every
flight cause, personalize it for each traveler. there's no way for me to know. my suspicion and fear and fear of a lot of other organizations who represent travelers is that if we move to this model, the airlines will have a strong financial incentive, whether to improve airline seats and make their businesses better or not, they have a strong financial incentive to charge consumers more as an individual based on what they think they're willing to pay. >> sharon, let's hear about that. >> first of all, -- [inaudible] i mean, there is an incredibly competitive -- incredibly competitive marketplace out there right now. and i do want to address something charlie said. i have a chart for you all on the table outside that actually shows that in real terms airfares have decreased, even including ancillary services. and it puts it in relative
comparison to movie tickets and other things that have increased in real terms. so the facts are the facts. airfares have decreased and flying is an incredible bargain. but we do have programs right now that are called frequent flyer programs, and yes, just like when i pull out my keychain actually, i shop at safeway, and i've signed up for the safeway bargains and a sending personalized coupons because they know i only drink on the milk. -- almond milk. it's really no different in terms of loyalty programs that airlines have today. i'm really baffled by all of the hullabaloo around in d.c. first of all, i think it's a resolution, it's a long way off. i'm much more focused on what we can do today to solve more tickets. i don't think that in d.c. poses
all of these issues, potentially. and again, i think that we have an incredibly competitive marketplace right now. if you want to shop anonymously now, you can. or if you want to be like me with safer, i give them my information and the taliban my likes and dislikes, and i get personalized coupons. it's a choice that the consumers can make. >> so there are a couple of things on the ndc aspect. first, the personal information side. in reading, talks about authentication to give you authenticate. you been doing an anonymous search and that's what we're talking about. you at least have to identify if you're an adult, child or senior. the fares are different a key can get a quote without knowing at least are you an adult or a child. corporate travel, corporate travel has to identify
themselves with your personalize different prices. of course, with different passengers. so this exists today. what doesn't exist today and what is fully capable today is requiring that kind of scenario where, while i can search and i login, they have to know who i am. i think i'm it's almost tinfoil hat thinking. and airline could do this on their website. orbitz, travelocity could do this if they wanted to. and they don't. ndc doesn't enable immediate capability in collecting or using personal information in order to try to please customers with higher prices. the interesting part about ndc, and to tell you that transparency comparability and competition, is, i mean, it's really the answer that a lot of people have been calling for. they want to be able to see side-by-side these authors. if i'm an airline, today, using
what we call the filing system, so airlines soviet schedules and fares to do different companies, aggregators like -- bundle those together and make them searchable in the indirect channel for agents and online travel agents. the only people that's transparent to our airlines. your reliance on what ever information is actually presented. a perfect example of this is one company, sabre, was able to buy their system against the airlines for pursuing an xml solution to the tune of i think it was annualized $500 billion in revenue on its one site alone. now, and if we ca transfer systm how would you accomplish this? if passengers, consumers could see all of the prices and its fully transparent, you shouldn't be able to have this kind of market power. so the argument that somehow today this is is transparent, i just don't understand.
what ndc, i mean, it really just is an xml standard but it really is just that simple. the strawman of personal information, requirements and airlines using that information against passengers. if you're using xml, this is a live conversation. it's not findings that you submitted at the end of the day on friday. this is, i sent a request, the airlines have to send me the best offer. whether they know me or not. there's no inherent requirement to identify yourself. but if they send me a bad offer, i'm now looking at all of their competitors, inclusive of all of these different products because the system allows you to submit that information. and if that's a bad type i'm going to go with someone else. so you will lose business. look at it from a different perspective. when you go to one of those sites today, most people are going to look at the lowest fare at a lot of people go to the
airline website because they want all the other information. now, that lowest fare, say there are two carriers and say they are coming in, a little bit different in fare but if you're the higher-based fare, but say your bag fee is lower, said a passenger wants wi-fi and you offer wi-fi for free or for a lower price or what have you. chances are in today's environment you will lose a passenger because they can see the information and they can actually build a full offer and see the whole price but using xml if you're using ndc come or not, xml a loan does it. now you have that all side-by-side. so if you're that kerry with a higher fare, maybe now you become a lower fare because that travel has now been able to indicate the of the products that they want. so from an airline perspective there are a ton of benefits. from the consumer's perspective there's a ton of benefits. this is all happening whether or not ndc issues or not.
as andrew said, xml is being used at the airlines are using xml on their own site. they're signing deals with third parties. so with a without ndc, this is the future of air travel, which i think if one agrees is what's needed, more transparency, more ability to compare. ndc is an open standard. we have a working group of a ton of different sectors of the economy, or the industry including ota, gds, anyone you can think of. and at the end of the day it's voluntary. like oliver other statistics on the my room the tags on bag tags that were bad for maybe a year or so. we wrote the standard of the. no one uses it. it's not up to us. we are not a regulatory body but we don't have the kind of power to require the market to use this. it is our responsibility to try to help the airline industry
standardize what is being done to make it cheaper to do it come to make it easier to do it, and to increase competition in this regard in the distribution space. >> so there are two different ways to personalize a fare under the system but one is to personalize the price, what you worry about. and the worries that i've seen i guess is that instead of being able to know that okay, there are this many seats left and it's this much more here, and just -- i have no life. you would have -- the other way is the examples you outlined where you're going to give this passenger a free check to back him maybe even though they don't have elite status because they almost do. charlie, let's hear from you. what do you remember -- what are your members would about? do you have an objection to personalization i service, or is it personally should buy service or price? >> [inaudible]
>> i think they are a scam. [laughter] however, the airlines have sold us on it, and as they're looking at big coins inside look at regulating them, i think maybe frequent flier myers i getting to be just about even more than bitcoin. but that's another discussion. let me sort of go back to what we have for consumers. i just want to go back to my same thing. we've got people here talking about who is going to control data. who's going to tell us what our tickets cost. anywhere that the airlines sell the ticket they should tell us how much tha the tickets going o cost and we should be able to figure it out. the airlines, through this ndc program, our, it's another way that they can hold the data closely themselves and not share it with the gds, not share it with google. not share it with the online
travel agencies. and when they don't share it, we can find it everywhere that we go to touch airfares, how much the total cost of the travelers going to be. the system of xml in comparison-shopping already exists. the technology is already there. i'm on the committee, i was appointed a committee by the secretary of transportation, the advisory committee for aviation consumer protections. it's part of the faa reauthorization bill, which passed a couple of years ago. and as one of our meetings we had airline representatives show us how the system works. then we have sabre, which is one of the big gds programs, come up and shows how the system worked. you, today, if you have the data, can say, i'm traveling with my wife and two kids, we're going to have for carry-ons, two checked bags, and we'd all like
to sit together. how much will it cost us to fly from orlando to chicago? and then you will be able to see across airlines how much that costs based upon which a vast. it already exists. and i agree, what iata is proposing is beautiful but we don't need to it them. it's already going on. it can happen right now as long as the data is released. >> i agree. it is already going on. in fact, that's what united and delta have signed agreements with travel port to sell their premium seating. so it's just, i mean, the marketplace is working. maybe not as quickly as you would all like, but it is working. we are selling and solaris through gds's but we want -- >> you are using plural. >> we want the ability to be able to negotiate with gds's so if jesse lewis not going to have cabins on a flight from jfk to california, they want to be able to have a picture of that on a
gds. they want to be able to differentiate their project, their product. so you need to be able, and that negotiations with the gds to tell the gds, this is how we want our product displayed. so and so there's are being sold through gdss. they will continue to be, so i'm just not sure what the problem is. >> one quick observation. you mentioned chicago. and all these examples we shouldn't ignore there's one airline that doesn't have a whole lot of insular these but doesn't -- southwest. is there going to change in any of these scenarios? >> southwest will have to make its own decisions on how it wants to serve in the future. i would say one thing. a lot of these issues our public it, particularly not deeply in the weeks. one easy way for me to shorthand them is to look at motivation. who are you serving? as an entity in this debate, and because of that what are you trying to accomplish? so if you're looking at two
players in this, the two largest players involved in this, you have the airlines working from one set of priorities and get i think travel agents and agencies from a different line. at the end of the day a travel agency does not really care. they're going to have returned business. online travel agency and off-line travel agency, even corporate traveling department. their priority is measure that air travelers get where they're going in the best most efficient possible manner for the lowest cost. they are the ones who are terrified about this ndc approach. the airlines as you've heard both of the airlines have talked about how they plan to use the money that they getting from their profits now to make the travel process better. that's great, but that is a different motivation. when your motivation is to make sure you are maximizing the amount of revenues you bring in for whatever purpose, that is not the same motivation and it's not inclined assistance with what a traveler needs. because in maximizing the amount of money you get and ensuring
that you get the lowest and best fare are two completely different priorities. so at the end of the day we think this is solvable. we think it's solvable by focusing on the fundamental principles of choice and competition and transparency. that as a traveler and the shopper, if you can see everything that's out there, then you can make an informed decision about what you want to buy and you can make a decision about, is it worth anything come is a with a bang for the seat upgrade? is it worth me doin doing this? the airlines have plentiful provide a conspiracy and also claimed the market is providing it as we speak. if you search for a traveler recently like i did yesterday, there is no option to check to say i have two bags or want to sit with my kids or come it doesn't exist in today's system but it could exist literally almost overnight if the airlines opened up their existing fee structure and fare structure to the same systems that use today and that we can all work together has used new technology to improve that system and
unleash this next wave of innovation that we've seen in the past. >> sharron? >> i just want to, let's be honest. and are represents for profit companies as well, so i think in terms of motivation, there's nothing wrong with the for-profit motivation and i think your members are for-profit. and then secondly, i'll say again, we want to sell our products. so if it doesn't behoove us to hide optional services. we want people to buy those optional services. the other thing is the department of transportation has the rulemaking in which they say airlines can engage in unfair and deceptive practices and so if these are being hidden or if there is a deceptive practice, there's something that's already in place that enables customers to complain and to change that. so i think, back to the beginning of the conversation what we are really talking about here is certain players who
owned a great deal of the market place that don't want to give that up. airlines have other motives. we want to be able to ensure that when we disputed our products, we can do it in a way that is not the same we have done it in the past but in davos more transparency, more innovation, pictures, and displaying the product the way we want to. we think that's good for the consumer. >> yeah, i mean come on the economic piece, i mean come it's kind of an interesting point. of course, a business's motivation is to increase and maximize revenue and, therefore, profit. you can't do that and act and anti-competitive weight unless you have the market power to do that, which airlines do not. this is a hypercompetitive industry around the world. there are a thousand airlines in the world and you have speeded there will only be three flying left and u.s. if the merger with your. >> but but alliances are still
competitive. when you look at can you're talking about lower fares versus high revenue, and they are not different, you cannot offer higher fares in this market place and get away with it. that's the reason fares have gone way down to is the reasons why airlines have not once covered the costs of capital, ever but even in the best year. they only got halfway there. is is in an industry that is reaping billions upon billions of dollars in profit. a big element is reducing cost. and you talk about how much time it's taking. you can't just turn this stuff on. these are commercial agreements. i mean, you could understand trepidation of some who may not necessary want to jump into commercial agreements with companies who in their own words tried to take another company down. as a testament to consumers by hiding prices and by hiding fares. i don't think this is all that complicated, and at the end of
the day, whether or not we did an xml standard, this stuff will happen going forward. we think the axonal standard makes it faster and easier, and we think that opens up innovation to a lot of people. the 12 year-old in his basement and start writing applications that can do stuff like this. the opportunity there is pretty astounding, but, you know, i just, i don't see that side of it. >> let me get the consumers any. i have to chuckle when they said that 12 you in his basement can start writing these applicatio applications. i've been pushing the airlines to put an application together so that they can trackbacks that are checked, and they haven't been able to do that yet. [inaudible] >> it's a whole different -- paper tags that have numbers on them that you could scan to but never forgot how to do that yet.
expunging how difficult it is, and i agree with you. it is difficult. part of that leads me to where i started this whole thing. the data on pricing, on all the ancillary fees, if it was released into a distribution network, then people whose job it is to write software, to come up with the wonderful systems to help consumers have a better interface, such as google, expedia, and other people, you know, work in the background. a lot of people you have even heard about. they would then have the data to work with to create some great new products for us, and that would almost be a whole rush of new entrepreneurial software systems. so we are missing that by having the airlines withhold data. the other, how many here work
for republicans? one? >> there's got to be more of you out there. >> anyway, one of the things we look at the national airline policy, right now where the national airline policy that is kind of anti-industry. they withhold of this data. therefore, the corporate travel managers can't tell you how much their budgets are going to be. they then, the refunds, when you have to get your fees refunded if you're just a regular old traveler, you have a hassle doing that. everything comes through with nco, just a general set of. if it was distributed as marketed fees, everything would be marked. and if you said, okay, like $25, you know whether it was for established a you would know what it was so internet, whether for the first bag check the, that could come along. competition would be helped for
consumers because we would then know what the prices are. and so what we have right now is we've got a system where, unfortunately, we've got to economic giants fighting each other for control of data, and the consumers are losing. and the rest of the economy is losing because they can't save the money that it could if it had the data to work with. and so from a consumers point of view, i've just been working to try to get the data released. and i don't know what's going to be in the next nprm. sharon is exactly right. there is a law that can be misleading into septic pricing. we've been working with a department of transportation. everything is kind of stuck at omb right now but should be out sometime in the next month or two. >> just kind of a factual point. how often is the federal trade commission, ftc brought action
against airlines for not getting straight with customers? the last five years. >> they do it all the time but as a matter fact, they probably have more findings over the last year than they have, you know, in a long time. >> i think relative, relative to the number of people are better traveling, it's fairly small but i think the fact that there are laws in place, there are rules in place and there is enforcement taking place. so the system is working. >> i'm not sure if anyone bought a plane ticket -- i think that the system is broken. i think that the airlines may think the system is working because they figured at the righteous new way to unbundle all the services and charge for separate pieces. which absolute is here to stay. it is a business decision that is not going back, turn back to the old days anymore. but without consumers being able
to see what those prices are, without airlines being required to show those prices for all the baggage, change flights, boarding passes, how much it will cost for your seat assignment, what he means is there is deception going on for the consumer. from the consumers perspective off of the phone i bought with cost less than it cost me. i had to -- we are 100% in line is, i agree with everything philosophically that the airline representatives said about increasing choice interest that you. i fear everything that has been done on paper works against that, and the easiest proof of that is that there is no transparency today. if there were it would be much easier for consumers to make these inform decisions on what they wanted to buy. >> consumer rule number two, which is the law of the land today, requires complete 100% transparency. in other words, you don't get on a plane -- no, optional services. that's the law of optional services.
so you can't be charged something that you weren't aware that you're being charged for. that is the law. that is the law today. requires airlines to have within one click all of our ancillary and optional services, transparent. what these guys want is to settle a commercial battle through a rulemaking. and so i think that in terms of the consumer come again i will go back to what i said, we want to sell a product which why we -- which is why we are transparent, and what the debate today is more about is who gets the money for distributed the product more widely. and all we're trying to do is make sure we've got a more open architecture to distribute our product, and that we tried to bring prices down for the consumer. >> right, and just one comment. sharon is absolutely right.
consumer rule number two requires that all of the ancillary fees he very clearly established. however, it allows you to do it in ranges. so if you go to the ancillary seat reservation, zero to $90, thank you. that's very helpful to us. it says baggage fees, zero to some number. because this year is for an elite person who doesn't have to pay. the other numbers are for the common travelers. but we don't know on a ticket specific basis how much those ancillary fees are going to be. ..
>> you wouldn't be required to pay that bag fee. and that's the problem with that approach. a one-size-fits-all approach isn't reflective of today's marketplace. >> at this point we have to wrap, so i want to make one suggestion to the people developing online travel search sites. let me add to my preferences. i have this elite status or this card so at least you can show what fees actually apply to me. and i don't see anyone doing that. so that idea is free further taking. -- for the taking. i know you all have a chance of lunchtime panels, we thank you for choosing this one. [laughter] [applause]
>> at 2:00 eastern, a discussion on u.s./russia relegal conclusions. president obama heads to obama next week. the brookings institution will look at the issues between the two nations including policies towards syria. and all this week about 7:15 eastern here on c-span2, we feature "washington journal"'s spotlight on magazines, tonight correspondent be james fallows who recently wrote about california governor jerry brown. then tonight on booktv prime time, it's fairs and festivals. we'll begin with the harlem book fair and a science and health panel. then from the los angeles times festival of books, dennis prager, author of "still the
best hope." we'll follow that with the gaithersburg festival and lynn olsen who wrote "those angry days." booktv prime time tonight right here on c-span2 at 8 eastern. let's take you live now to the mall in washington d.c. there you see the martin luther king jr. he moil. crowds gathering here today to commemorate the 50th anniversary of the march on washington where dr. king delivered his i have a dream speech. former presidents carter and clinton as well as president obama speaking at 2:45 or so eastern. we have live coverage on c-span throughout the day. and a bit earlier in the program, the widow of slain civil rights leader medgar evers spoke. let's show you some of what she had to say. >> fifty years ago we gathered in this very same spot.
we felt, in the words of another mississippian fannie lou hamer, i am sick and tired of being sick and tired. and i do believe that that is what the crowd some 50 years ago was saying to all of our leader leaders. dr. king took the helm, and under his leadership and under those who gave their lives such as medgar with evers and so many others -- medgar evers and so many others said enough is enough, america. this is our country, all of us. we belong here. and here we are some 50 years later aissessing what has happed
over the spirit of time; where we are and what we must do. for a brief period of time, i think we fell asleep, and we said we have moved forward, and everything is okay. but we know today that everything is not okay, that there has been a retrenchment in this country as far as civil rights and equal rights is concerned. we marched, we sat. the triumphs and even defeats belong to us all. dr. king told us that he might not get to the mountaintop with us, but he said that there is a promised land, and america is that promised land for all of
us. we're bonded by deep roots of individuals that inevitably become a strong group to be reckoned with, and our strength is in our numbers. in today's world there's emphasis on individuality, how can i reach my top? i'm sure that no matter how strong any one person may be, they may be strengthened with strong support from each other, encouragement and guidance from those of us who have walked their path. the movement can no longer afford an individual approach to justice. ours is an interconnected struggle; black, white, male, female, young, old, everyone. we are all entitled to and protected by this country that
we call home. and at times it is necessary that we let those who represent us on capitol hill, those who represent us in our communities know that we are a force to be reckoned with. many of our messages today talking to today's youth and our elders. and i look specifically at those in the middle, new participants, our young -- new parents, your young professionals, youthful educators and community activists. they are young enough to relate but also a establish in our community, and i ask you: how will we bridge that gap? what are our next steps? because this country in the area of civil rights has certainly taken a turn backward. am i depressed? no.
i am energized to move forward and to be sure to see that the gains that we have encountered and had come to us that we have worked so hard for are not lost. so i do ask you what are our next steps. we created a framework, but there's still so much work left to be done. many of our civil rights leaders, including my husband and dr. martin luther king, were till of an age -- still of an age when they took the lead. with that question in mind, i challenge you to get back to community building. it is your problem. it is our rob. it it is our problem. it is our neighborhood. these are our children. you are the parents. but in that same breath, the victory will be a collective one. it is with a clear conscience
knowing what we've done and do that we will reach that mountaintop, and we will overcome. but it will take each and every one of us in unity, in unison letting those who say that they manage a this country of america know that it's the people, it's the voice and the actions of the people that say we must overcome and will eventually say we have overcome because of the involvement of each and every everyone. that is our challenge today. let us move forth and do what we must do remembering freedom is not free. we must work for it. [applause]
>> and, again, those remarks from earlier today. back live on the mall, you can see a rainy day here in washington. about 80 degrees or so, some rain throughout the afternoon. a couple more highlights coming up in our coverage. we understand an organized ringing of church bells planned for the same time of the day that reverend king delivered his call for equal rights. should be about 3:15 this afternoon. also speakers to come will include linda byrd johnson rob, the daughter of president lyndon johnson who signed the 1964 civil rights act and the 1965 voting rights act. also we'll hear from representative john lewis, the longtime leader in civil rights battles, and president obama scheduled for about 2:45 p.m. eastern. our hive coverage on c-span, and if you miss any of it, we'll do the whole event on a replay tonight at 8:00 eastern again on c-span. >> one of the things i looked at as i was exploring this was i looked at a lot of the county
records in which these colleges are. and when you look at the colonial county records, very often you'll have the name of the president or the name of the professor and then listed with their taxable property will be an enslaved person or two or three. >> did students bring their slaves? >> yes. students -- >> students actually brought their slaves to school with them? >> yeah. and so if you think about this, what then happens is if you look at the name of the president and three lines over part of his taxable property is an enslaved person. what you'll often have in the case of princeton or harvard, you'll actually have the president's name, ditto the college. well, who owns the person then? when -- in the sort of common knowledge of the town, of the local area, the president and the college are kind of inseparable anyway. >> craig steven wilder on the connection between elite universities and a path intertwined with slavery, sunday night at 9 on "after words."
part of a three-day holiday weekend on booktv on c-span2. and booktv's book club returns in september with mark leibovich's "this town." read the book anden gauge on our facebook page and on twitter. >> permanent members of the u.n. security council are meeting informally to discuss a resolution that would authorize the use of military force against syria. britain put forth the proposal today as momentum seems to be building among western allies for a strike against syria. u.s. leaders, including vice president joe biden, have charged that president bashar assad's government used deadly chemical weapons near da has cuts last week. u.n. inspectors have not said whether they've reached that conclusion. now a discussion on egypt's political future and its relationship with the united states. speakers include middle east analyst and former state
department officials from the project on middle east democracies, the atlantic council and the brookings institution. monica coleman was the host for this hourlong national press club newsmakers event. [inaudible conversations] >> good morning. welcome to the national press club's newsmaker event on crisis this egypt. before we get started, i'd like to go over a few housekeeping rules. first, again, if you haven't already silenced your phone and other electronic devices, could you leads do so at this time. also this is a press conference-type forum. it will be approximately an hour. each speaker will talk for 5-10 minutes, and then there will be a q&a. q&as are limited to members of the credentialed press and members of the press club.
when you are called upon, please state your question clearly. we will be repeating it here at the the mic for our television audience. also state your name and your affiliation and keep your answers -- your questions brief, please. no lectures. we want to get as many questions as possible. so, again, this is the national press club's newsmaker event on the crisis in egypt. the world has been looking on as it seems that egypt's democracy is unraveling. what we're seeing today is not unlike what we saw in 2011 with violence and bloodshed which ousted the current president then, hosni mubarak. what is happening now seems to be very similar with violence and bloodshed, and once again under heavy protest, the new president -- president mohamed morsi -- has also been ousted,
and he is also a member of the muslim brotherhood. so what will happen in egypt now? will they be able to recapture their democracy? should the u.s. be involved? and if so, how? today we are quite honored to have very special speakers with us who are well renowned in the area of egypt and middle east. our first speaker to my right is stephen mcinnny, executive director of the project on middle east democracy. steve has a master's from stanford, and he also has graduate studies in middle east politics, history and the arabic language from the american university in beirut and the american university in cairo. steve's work can be found among many publications including "foreign policy," "the new republic," "foreign affairs" and "the washington post."
his work has also been seen on bbc, msnbc, al-jazeera and the cbs. and the second speaker on my right is ms. tamara cofman wittes, and she is a senior fellow and the director of the middle, of the saban middle east policies at the brookings institution. her prior work includes being deputy assistant secretary of state for near eastern affairs from november 2006 through -- i'm sorry, from november 2009 to january 2012. she coordinated the u.s. policies on democracy and on human rights in the middle east for the u.s. state department. she has also overseen the middle
east partnership initiative, also known as mepi, and was assigned as deputy special coordinator for middle east transitions. and she is also, was central in the u.s. government's response to the arab awakening and is the author of the book "freedom's unsteady -- i'm sorry, freedom's unsteady march." america's response to -- america's. >> role. >> role in arab democracy. sorry. [laughter] and our third speaker at the end is michele dunne, and she is vice president at the atlantic council, and she is the director of the atlantic council's rafik hariri center for middle east. her prior work also includes being senior associate at the carnegie endowment for international peace, a visiting
assistant professor at georgetown and a middle east specialist at the united states state department. while at the state department, she assumed many roles and assignments including director of middle east and africa, u.s. embassy in egypt, the national security staff. she was also the u.s. secretary of state's policy planning staff member, the u.s. consulate general in jerusalem, and she also was with the bureau of intelligence and research. so as you can see, we have a wonderful team of experts here who are going to answer our questions on what's happening in egypt. so if you could help me warm them with a nice applause. [applause]
>> okay. thanks, monica. i'm going to just start with a few brief thoughts about where we are in egypt today and a few be words about what we might expect in the weeks and months ahead. to begin with, in terms of where we are now in egypt, in respects we are witnessing what seems to be a return to authoritarianism and a rise of the old state dominated by egypt's military, security and intelligence apparatus that reigned for decades including under the rule of hosni mubarak. for many of us who had hoped in the early 2011 that the uprising and revolution in egypt in january and february of that year would lead to a transition to democracy, to accountable government that respected, that respects the rights of egypt's citizens, this has been very deeply disappointing. i'll briefly sort of describe the current scene and then, you know, leave with a few thoughts
about what we might see in the time ahead. a lot of the analysis of egypt over the past few years has described three main groups of political actors in egypt; the military and along with the military sort of the old regime and the tomorrower ruling national democratic party, the second group being the islamists, most prominently led by the muslim brotherhood, and a third group being the sort of liberal and/or more secular political forces. this group has included both political parties as well as ngos and is civil society organizations including human rights organizations and, perhaps most importantly in the liberal and ec lahr bloc, have been sort of more informal grassroots movement such as the april 6th youth movement, the campaign which played leading roles in organizing the street protests this 2011 and then this spring in opposition to president mohamed morsi and his government and sort of the leading, driving force behind the protests that began on june
30th that eventually forced morsi from our. what we've often seen and a lot of the analysis of egypt has described that when two of these three blocs of the sort of military and old regime, the islamists and the sort of liberals and seculars, we've seen several occasions where two of these three blocs have sort of joined forces and effectively forced their will to some degree on the third bloc. and we can cite, you know, three or four instances of this. you could describe the revolution in 2011 as sort of the liberal forces joining with the islamists and the brotherhood and were able to force mubarak from power. soon thereafter you saw the military establishment and the supreme council of the armed forces sort of ally itself with the brotherhood and islamists and were able to sort of ignore a lot of the demands of the liberals. you could, to some degree, describe the presidential election last year in june of
2012 as the liberals perhaps not unified, but enough of the liberals joining forces and and supporting mohamed morsi during the second round of presidential elections, choosing, you know, many liberals who were skeptical of the brotherhood nonetheless chose to support him over the choice from the old regime, the military. and then host recently now we've seen sort of the latest configuration has been the military joining forces with the liberal and secular forces to oust morsi from the presidency. i think a lot of what we're seeing right now is the military sees its opportunity to regain power, and it now seems to be taking steps to insure that the other two groups that can no longer sort of ally themselves against the military again and, you know, sort of force it from power or force its happened as was done in -- hand as was done in 2011. first and most obviously, the military has been cracking down viciously against the muslim brotherhood. they immediately following the
coup on july 3rd, today arrested many of -- they arrested many of the sort of leaders of the brotherhood movement and brought charges against them. it's viciously attacked the supporters of mohamed morsi and the brotherhood in the streets, leading to violence in which more than a thousand people have been killed including more than 600 on august 14th alone and about 4,000 wounded that same day. and we've also seen a vicious campaign of prop began da -- propaganda including using the state media against the brotherhood and its supporters, defaming them as traitors. and we've also seen more recently this sort of defamation campaign and the targeting by the military moved beyond just the brother hood and their supporters and to start to also attack some of the liberal and secular forces that the military may see as a threat.
you know, we've seen several examples of this, and i think what we're seeing is the military targeting actors that the military intelligence apparatus have seen as troublesome either currently or in the past, over the past few years. to cite a few examples, po happened elbaradei was the most prominent politician that backed the military's coup. he then resigned on august 14th, and he was immediately attacked viciously in the media and by the former regime, and charges have been brought against him for breaching the national trust, and he's now in austria, staying outside of egypt to avoid prosecution. the april 6th hiew. which i mentioned has long been seen as sort of a threat by the military, they were seen as instrumental in the 2011 revolution. also some of the leadership of this movement in recent weeks
has been critical of the military, including of the violence that we've seen in the last couple of weeks. and just a few days ago we saw the public prosecutor in egypt announce that two high profile youth activists associated with this movement were under investigation of charges of espionage for receiving foreign funding for their activism. this is of note not only because it's showing the military attacking its critics, but actually both of these young women had actually been support i of the military's actions including supportive of the coup. but nonetheless, i think we're seeing sort of preemptive actions by the military and sort of the old regime apparatus not only to take on its current critics, but any that a it fear may be willing to kind of stand up against it moving forward. in addition, there's sort of the community of ngos including human rights organizations in
egypt, and just in the last three or four days we've seen egyptian police visit the offices of several international ngos in egypt including human rights organizations to apparently sort of intimidate those organizations, intimidate their staff. these have been included organizations that have been willing to write and speak critically of the military in recent weeks. we've also seen several newspapers, sorry, articles in the egyptian press including today in the state newspaper describing conspiracies in which the united states government -- including ambassador patterson -- was working with the brotherhood in order to shug l terror i -- smuggle terrorists and extremists into egypt from gaza and working with ngos in order to make this happen. and this is sort of representative of sort of a widespread disinformation campaign, and i think it's very troubling because these, the
implication of egyptian ngos in this way, i think, is feeding on this sort of heightened sense of xenophobia and except anti-americanism -- especially anti-americanism that we see now in egypt. and i think this is feared by many to be sort of a precursor to a weed spraid crackdown on the ngo community, including any that the military establishment feels may be be critical of them in the months ahead. one final piece i would mention is labor movements as well. labor movements and sort of social protest movements were also seen as instrumental in the 2011 revolution, and these social protest movements have continued in recent weeks. and we've seen quite recently some efforts to crack down upon these movements and also to defame these movements as tools or instruments of the muslim brotherhood when in reality the brotherhood has very little reach or very little influence with the labor movements. but we've seen several instances
of protests, social protests and labor movements coming under attack and then articles in the press and statements by the minister of labor and the deputy minister of labor attacking these movements as being tools of the brotherhood to sow chaos and undermine the state. i will kind of leave my remarks on the current scene there. i also maybe just briefly mention, you know, we now see a process underway for amending the constitution. the constitution that was ratified in december and passed by referendum, that was written by the largely, predominantly islamist constituent assembly. we've just seen the release of sort of the recommendations of a ten-person committee that was selected to make proposed amendments to this constitution, and i would say that these amendments are not encouraging for those of us that wish to see democracy e hedger in egypt -- can emerge in egypt.
rather than addressing some of the flaws that you could point to in the constitution from the perspective of democracy and human rights, it reinforces some of these and has some sort of troubling, the proposals include some troubling steps such as sort of rewriting -- there's some hints at kind of moving back toward the old regime including removing the clause in the constitution that forbe bids senior members of the old ruling party from participating in politics for ten years. that's -- they're recommending that that be removed. there's also some rewriting of some language in the constitution about the sort of heroic martyrs of the january 25th revolution. january 25th has now been omitted, and it's described as the revolution, and there's a question of now whether they're sort of trying to rewrite and look at june 30 beth as the revolution and this year as sort of the heroic revolution of egypt. i think a major question moving
forward will be how long general assisi and the military are able to retain their current popularity. it does seem they've been extremely effective up til now in using the state media and information to become extremely popular in the country at the moment and the general public. and how long they'll be able to sort of hold together the broad coalition of support that they currently enjoy. i would say that they've already sort of survived two events that some had predicted could fracture support for the military; first, being the use of large-scale violence against protesters. many predicted that if they used serious violence against the sit-ins of the supporters of mohamed morsi, a lot of the sort of liberal forces that have been supporting them would split away. mohamed elbaradei resigned, but very few figures have so far left the government or splintered their coalition. the second event that many predicted would erode support
significantly for the military was the release of former president hosni mubarak from prison. he was released last week, and i think that has had, as of now, less of an effect than many expected. we will see in the weeks and months ahead, it's possible that he may be cleared of charges including for killing protesters in 2011, and that might spark more of a reaction. i think one major challenge for the military will be to respond to economic pressures. the rising discontent against morsi and his government came in large part from his government's inability to address egypt's economic woes. i think egypt's military will, you know, i think we've seen those signs that they're ready to undertake serious chick reform -- economic reform. instead, they seem to be counting on the largess of the gulf states, namely saudi arabia and the united arab emirates to sort of help them kind of hold egypt's economy together. but but be i'll leave it there
to tamara who will talk more about regional dimensions. >> well, good morning, everyone, and thanks for coming. um, i'll take just a few minutes to talk about the regional politics and the regional dynamics surrounding events in egypt and how the positioning of different can regional actors may affect the trajectory there. let me start by giving you a little context, which is that for decades under sadat and mubarak egypt played and has played a critical role in security and stability. it's got a very geostrategic location sitting on top of the suez canal which carries every year about 7% of the world's oil and about 13% of the world's natural gas. the camp david treaty, of course, was a historic event and an anchor of arab/israeli peacemaking and has prevented ever since any major interstate
arab/israeli war. and so because of all of this, because of in this the egyptian role in regional stability, it's no surprise that the governments of the middle east feel major stake in egypt, indeed, just as the united states does. mubaraking also had -- mubarak also had close personal ties to a number of leaders in the states of the arabian we peninsula, especially king ab la of saudi arabia. and mubarak was a key diplomatic partner for those arab states and for the united states who in the years prior to the arab awakening, i think, presented a sort of coalition on be behalf of the current balance of power in the middle east. and mubarak was really linchpin of that diplomatic effort. so it's fair to say that the monarchies of the gulf were never fully reconciled to mubarak's fall, and generally they're not comfortable with the
prospect of democracy in their neighborhood. but they had good ties with the egyptian military, and they've sustained those since january 2011. the rise of the muslim brotherhood, however, troubled these states deeply for a few key reasons. mainly, the muslim brotherhood was seen as a threat to this regional order that these arab governments had built because of its ideology. but the brotherhood was also seen as a threat because over the years the brotherhood itself -- which as some of you know is an organization that has national branches but a shared ideology, if you will, across these various national brotherhood groups -- and has produced offshoots, some of which have been quite violet. violent. including hamas and over the years in egypt a number of
splinter groups off the brotherhood have become significantly troublesome terrorist organizations. the brotherhood idealogically, though, and politically also has the effect of challenging the gulf monarchies in their claims to islamic legitimacy for their rule x. that's one of reasons why these countries find the brother hood so threatening. and just to give you an example, since 2011 you've seen in the united arab emirates the arrest and trial of a number of people who were named as members of the brotherhood on charges of incitement, undermining national security and so on. morsi's behavior as president of egypt made these gulf arab states even more anxious, i think. his visit to iran which was his, i think his first visit abroad be as president, the talk of normalizing relationships with iran, his support for hamas
especially relative to support for mahmoud abbas and the palestinian authority in ramallah, economic mismanagement of egypt under morsi, as steve noted, was a real problem. but economic mismanagement in egypt because it's so large and because it's been a commercial center and a banking center for a lot of the middle east for a long time, a manufacturing hub, a distribution hub for a lot of businesses that sell around the region, the economic situation in egypt has significant implications for the rest of the region. michele is telling me morsi's first visit was to saudi arabia, not to iran. thank you. and then, of course, morsi's tense relationship with the egyptian military which, as we saw in all the reporting that's come out since july 3rd, grew more and more tense as the spring wore on. so the gulf monarchies cheered
on the military ouster of mubarak on july 3rd and rewarded it with a good deal of financial assistance. i think it's important to recognize that that financial assistance is not all cash that the egyptian government can spend. a lot of it represents temporary deposits in the egyptian central bank which are important in helping egypt defend the value of its currency and fund the importation of important goods like food, like flour and energy. but this isn't money, this isn't all money that the egyptian government can then spend for national development. let me spend a few minutes on israel, and then i want to leave you with two broad points. i think many of the attitudes that i described the gulf arab as sharing, i think the primary characteristic that you can see
in the israeli government in its approach towards egypt since the 2011 revolution is ambivalence. they've been very ambivalent about change in egypt. but at bottom they had very close and cooperative relationships with the egyptian military and the intelligence services, and hosni mubarak was an interlocutor that they knew. there was a degree of predictability and reliability in that relationship although it was never warm. the ties between the egyptian security apparatus and the israeli security apparatus have been sustained since the revolution and in ways, i think they're stronger today than they've ever been. they were quite strong even under president morsi. the israeli government sought closer diplomatic and political ties with president morsi, but they were rebuffed. and despite that, i think they were at least a little bit reassured by morsi's behavior in
november of 2012 when he made himself and his government the guarantor of the ceasefire between israel and hamas that ended that gaza crisis. i think today, however, israel looks at the change of government in cairo and says, this is a group of people we know and we can work with. two broader points to leave you with. the first is that i think the sentiments that i'm describing among governments around the region with respect to what's happened in egypt suggests a real divergence with perspectives here in washington and the policy of the u.s. administration. and it's a divergence that goes beyond egypt itself. it's a divergence in analysis of the region, of what has happened in the region over the last two years, of what has been the source of instability. the united states, as president obama said in may 2011, sees
that there have been underlying social and economic changes in the arab world that have led to demands for more responsive, more accountable, more transparent government. and the president and many senior officials have said they don't believe stability will return to the middle east until governments are more transparent, responsible, responsive, accountable. in other words, more democratic. i think that many of the governments i've just been talking about see things rather differently. they see the demand for democratization coming from below in the arab world as itself a source of instability. it has made them wary about taking even limited steps toward domestic reform themselves for fear that if you give people an inch, they will demand a mile. and i think that this is presenting an increasing challenge for the united states in its diplomacy in the region. last point to leave you with is about sinai. i really think this is the space to watch.
when you look at the potential regional threats that could emerge from the events today in egypt, sinai is where you're going to see it manifest. now, as i said, egyptian/israeli security cooperation is very strong, but the security situation in sinai has deteriorated markedly since 2011. it's deteriorated because at first the egyptian police were simply absent from the scene in the wake of the january revolution and then because, frankly, the egyptian military during its period of direct rule and again now since july 3rd has become, has been required to focus so many of its resources and so much of its attention on domestic order that it doesn't have the same level of resources and attention devoted to maintaining security in the sinai. jihadi groups in the sinai have
grown bolder. they are, i think, working very hard to draw egyptian and israeli forces into some kind of direct confrontation, to draw israeli forces across the border into sinai. and this is an incredibly complex and combustible situation. my own view is that the longer the current political crisis in egypt goes on, the longer that egypt finds itself domestic situation destabilized by this standoff, the more we will see those kinds of jihadi groups and others taking advantage and the more egypt's domestic instability will produce instability in the region. thanks very much. >> good morning. i'm michele dunne from the rafik hariri center for middle east at the atlantic council. be -- i have four points i'd
like to make that are about u.s. policy toward egypt at this juncture. the first point is the need to look at this in the proper context. you know, the united states was really way too passive during the morsi presidency. morsi was a very unsuccessful president, a bad president, he, refused to build consensus, he took several undemocratic actions -- notably, passing the last constitution, the 2012 constitution over the objections of many egyptians. and the united states said and did very little. throughout years of u.s. policy, what the united states has done is simply to stay very close to whoever it was in power in egypt at the time. mubarak when he was there, the
supreme council of the armed forces when they were there, morsi and his advisers when he was there. and now, once again, the military-backed government. and this has led the united states into a real problem regarding exerting influence in egypt. as we know, in early july at the time of the military coup against morsi the united states urged -- correctly, in my view -- urged the egyptian government and the egyptian military to solve what had become a serious political problem, a problem of political paralysis and inability to address the serious economic issues in the country. the united states urged egypt to address this in a democratic manner and to, you know, play out the political game toward elections, perhaps early elections and so forth. that was not advice that the egyptian military took, right? they wrought things to a cop collusion -- they brought things
to a conclusion very quickly with a military coup. the united states, i think, believes that the kind of zero sum politics that we have seen in egypt are very destabilizing and will weaken the country. the idea during morsi's era that he would exclude -- he would not work with other political forces, he would try to, you know, run the country with the brotherhood alone which as we see was a failure, and the idea now that the brotherhood will be crushed and excluded and so forth, i think that the claims that we aeroin egypt -- we hear in egypt that the united states is trying to weaken egypt, i mean, steve made reference in a way to some of these conspiracies and so forth that are circulating are actually the opposite of what is true. the united states fears that what is happening in egypt now in these zero sum politics and the use of a great deal of repression is what's going to weaken egypt, okay?
so that's just sort of the context. but we do see the united states, i think, in a difficult position because it failed to exert what influence it could during earlier eras, and now, you know, unfortunately now, you know, trying to step forward this is causing a lot of confusion in egypt, and it leaves the united states open to charges of hypocrisy and so forth. my second point is that i think with if we look at the question of u.s. influence, we need to understand it in the right context. we need to, in a way, right-size u.s. influence in egypt. what is it, right? i mean, i think it's not the case that we can expect threats of cutting off assistance whether they're relatively small amount of economic assistance or the larger military assistance to really cause the egyptian government now to reverse course
and to, you know, change all its calculations regarding domestic politics. that's probably not going to happen. and that's especially true because the united states made what i believe was a mistake not to observe u.s. law and suspend assistance right at the time of the coup. i think if the united states had done that right at that time in a very simple way, we would have -- the united states would now be in a stronger position. we would be discussing what would be the conditions for resuming aid. and i think, you know, we're in a situation now where the united states didn't respect its own law, and so that, i think, diminishes respect for the united states. so, you know, we have to understand i don't think that just cutting off a little bit of aid here or there is going to fundamentally change the calculations in egypt, and these discussions of cutting off aid
are not very credible, because the united states didn't suspend aid at the moment when it should have. my third point, though, is that i think as we try to understand u.s. influence correctly, a lot of people are going to the absolute opposite conclusion which is that the united states has no influence at all, which i also think is incorrect. tamara mentioned, for example, gulf assistance, and a lot of people have said, well, you know, what difference does it make, you know, if the united states would suspend military assistance to egypt when gulf countries are coming in with billions in assistance and so forth? this is a very superficial understanding, i think, of the whole assistance question. egypt has been a country over the last decades that has had very deep and enduring security relationship with the united states. this is not just about dollars
and cents. this is about cooperation, it's about shared technology, it's about shared military exercises, doctrine. egypt made a profound shift in the 1970s from eastern bloc to western bloc and primarily american b doctrine weapons, etc. so the security relationship with the united states and what it means is much bigger than just the dollars and cents of the aid, right? so what the gulf countries can give, yes, they can easily give more than $1.3 billion in aid. they cannot replace what that military relationship with the united states offers to egypt militarily and strategically. this is also true economically. egypt has also been a country that has had a great deal of trade primarily with europe, also the united states and a great deal of tourism from the west.
from europe primarily. for egypt to shift from a country that has had this security relationship and economic relationship with the west to a country that no longer has any of that but is merely living on the largess of gulf countries, you know, it would with a huge shift for egypt, right? it's not that, it's not that dollars and cents from the gulf can simply replace these things that egypt has had. so we, you know, if we're looking at influence, western influence, american, european influence in egypt, it has to do with this much larger relationship and not with how many dollars are going, you know, being appropriated by the u.s. congress and going to egypt, okay? so we need to understand. and i fourth point is -- my fourth point is, so how do we think about it now, right? i think it's become clear that the egyptian government, the egyptian military has launched
on this course, this zero sum politics, repression of the brotherhood, exclusion and so forth. a very unfortunate course and a course i think that will promise much instability in egypt which will then, in turn, make it impossible to address the economic robs because you cannot wring tourism and investment back to the country in an atmosphere of instability. right? and that will lead to more instability. we've seen several turns of the wheel with egyptian public opinion, right? against the mubarak regime, in this favor of the calf, against the scaf, giving the brotherhood a chance, against the brotherhood, in the favor of the military. who would bet that this is the last turn of the wheel, that lick opinion is going to stay where it is now? i wouldn't bet on that, right? it's been a very unstable situation in egypt in terms of public sentiment, and it will continue to be so, right?
so there's going to be more change in egypt. so how does, how do we think about u.s. policy now? i actually think that president obama in his remarks to cnn on august 23rd has started to take this in the right direction. first of all, as you're aware there is finally now underway a review of u.s. assistance to egypt, an internal review inside the egyptian government. this is long overdue. but things -- programs are being looked at, and as i'm sure you're aware, many of the programs right now are, in effect be, suspended. although there is no announcement of a suspension to aid. i think the united states now is, as it should be, pausing. and, you know, a couple of the things that president obama said on august 23rd, he said there's no doubt we can't return to business as usual given what's happened. he was referring there, of course, to the august.
14th massacre and the use of a great deal of force to clear those demonstrations in cairo. he said with egypt the aid itself may not reverse what the interim government does, i be i think -- but i think what most americans would say is we have to be very careful as being seen as aiding and abetting actions that we think run contrary to our ideals. this is how we need to think about u.s. policy toward egypt now right? it's not simply a question of can we buy a little bit more, a little bit less influence by doing this thing or that thing. we have to really start thinking about a longer-term picture, a broader picture, what's in the best interests of the egyptian people and also what's in the best interests of the united states. and to what extent can the united states associate itself with the actions of the egyptian government in this situation?
so i'll leave it there. thank you. >> thank you to all our speakers. this was wonderful information. before i open up the floor for questions, i'd like to give each speaker the opportunity to respond to what the ore speakers have said. steve, would you like to start? >> sure. i agree with much of what was said by both tamara and michele. i would just, to pick up from sort of michele's last kind of closing points there that, first, we have to expect further changes in egypt, you know? we can't exactly know how and when things will continue to change, but it would be unrealistic and kind of foolish, you know, of after the last few years to assume that the sort of change is now done and that we can focus on sort of our
relationship with the actors that are now in charge which is, essentially, the mistake that i feel like the united states has made repeatedly. also i would just, you know, add that the united states policy in egypt, you know, must really fundamentally shift. i would, you know, michele was just quoting from president obama's remarks last week, and i would agree with her that his remarks reflect a positive shift if they are implemented. but i would also add that we've seen remarks from the president and from other high-ranking u.s. officials in the past that would have suggested a shift in u.s. policy that i think would have been some of the right shifts. tamara referenced the president's speech in may of 2011. in that speech the president sort of boldly declared that support for democratic principles in the middle east
and north africa would no longer be a secondary priority of the united states, it would be a top priority that would be supported by all of the political and strategic the economic tools available to the united states. i think that was exactly the right shift that was needed in the spring of 2011. i think, sadly, we haven't seen that really reflected at all in u.s. policy since then, and i would fear that the remarks last week by president obama might be only a sort of, you know, repetition of the administration and the president saying the right things but really being unwilling to back those up by substantive policy changes. and if so, i think the u.s. policy toward egypt will continue to fail as it has up til now. >> thanks. i'll be very brief because i don't have any areas of disagreement with either of my two colleagues here. i'll just say that i think we have to remember as we talk about policy, policy of other regional actors toward egypt that there's an underlying
social reality here that drove the revolutions of 2011. it's about demographics, it's about economics, it's about technology. these are trends that have been building up over years. they are not going away, and there's something that all governments in the region and beyond the region have to take account of and adapt to. now, some of that adaptation process may be very disorderly. but i think it's important that those looking at this situation not misdiagnose the root of that disorder. it's not the demand for democracy that is creating disorder. it's the need for institutions, especially government institutions, to adapt to this new social reality. and the quicker that they recognize that, the quicker that they make those adjustments -- in other words, open up and give people a voice -- i think the sooner the region will
stabilize. that fundamental recognition, i think, is what president obama articulated in may 2011, and i think steve's right, that the administration has a not done a great job of holding fast to that recognition and putting out policy instruments to help drive the u.s. in the right direction. but i think the same could very much be true, could be said to be true of governments in the region many times over. so just with that note of broader context, let me turn it over to hiche -- michele. >> thanks. i wanted to add one point to what steve was saying about the, this his initial remarks about the scene inside of egypt today, and you were talking about the military being behind a number of things. i wanted to bring out the dimension also of the internal
security services and intelligence services because they were very much on the defensive for the last couple of years, right? after the, after the fall of mubarak, the police and the security services, state security, the intelligence services were harshly criticized by the public, and they were sort of in retreat. they were, they were sort of cowed, they were taking a low profile in some cases with regular police not each showing up to their jobs -- even showing up to their jobs and so forth because they were coming under harsh criticism for past human rights abuses and intrusions into public freedoms and civic freedoms and so forth. they are now back. and the interior minister came right out and announced it a few weeks ago, we're back, and we're
back into political affairs, religious atears, etc. affairs, etc. unfortunately, there was no security sector reform during the first couple of years tolling the egyptian -- following the initial egyptian revolution in january 2011 when there was an opportunity to do so. there were very few, you know, the interior minister, yes, was tried and so forth, but there was very little -- there was no, no reform of the security services, there was just about no accountability for abuses that they carried out either during the revolution or before that. and so because of that, in this situation we now see the military and the internal security services which had been kind of rivals during the mubarak era cooperating very, very closely and trying to really recons